Netflix Badly Misses Subscriber Growth Goal

Netflix reported worse-than-expected subscriber growth in both the international (4.47 million net adds versus guidance of 5.00 million) and U.S. segments (0.67 million net adds, versus guidance of 1.20 million). Management could not explain the miss and instead pointed out their poor record of projecting net adds over the last two and half years. Netflix continues to expand its streaming base, ending the quarter with more than 124.35 million global paid subscribers, up from 99.04 million a year ago. Revenue of $3.91 billion came in line with our $3.92 billion estimate. Domestic streaming monthly revenue per paid member came in at $11.37, up 13% year over year and ahead of our $11.25 estimate. For international streaming, revenue of $1.92 billion was slightly below our $1.95 billion estimate as monthly revenue per paid member came in at $9.69, up 17% year over year.

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