Netflix reported a disappointing first quarter earnings after failing to surpass its 2021 Q1 net income this year, with the company informing shareholders that its revenue has slowed.
In its Q1 2022 statement, the video streaming firm reported a net income of $1.6 billion, below the $1.7 billion generated in the corresponding period, while losing 200,000 paying subscribers.
It was gathered that the company’s revenue growth was affected by its sign-in sharing option, which sees about 100 million non-paying subscribers access its content through about 200 million paid streamers.
Netflix also extended the cause for the slow earnings to rising competition from Apple, Amazon, Disney, amongst others sharing the streaming markets revenue, which was once drawn by Netflix alone.
Other factors weighing on the revenue growth of Reed Hastings-led company are inflation and the ongoing war between Russia and Ukraine, which cost Netflix 700,000 subscribers after suspending streaming access in Russia.
The report of the firm’s inability to surpass its earnings for Q1 2021 on Tuesday, resulted to a sell off among investors, as future growth remains blurry with the issues slowing revenue and subscribers lingering into Q2 2022.
This led to a 25% dip in share value, slumping to $262 during aftermid-market trades, with the company losing $40 billion to disappointed investors.
Commenting on the result, Netflix said COVID-19-fueled growth in revenue and subscriber base had lured the management into housing a higher expectation for both.
“We’re not growing revenue as fast as we’d like,” Netflix said, adding that “Covid clouded the picture by significantly increasing our growth in 2020, leading us to believe that most of our slowing growth in 2021 was due to the Covid pull forward.”
The streaming service now look to double down on investment in quality and recommendations to support growth viewership and earnings.
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