Netflix underwhelmed in terms of subscriber growth over its most recent fiscal quarter, adding just 1.7 million new members over the three-month time period. The vast majority of those hopped aboard internationally.
While that’s still trending in the right direction, the company actually expected 2.5 million additions during Q2. As a result, stock price sunk 15 percent in after-hours trading. Last year, Netflix added 3.3 million new members over the comparable 90-day time period.
Some of the lackluster gains can be blamed on the media, Netflix said in a Monday afternoon letter to its shareholders. Coverage of the company’s to “un-grandfather” longstanding members out of their current monthly fee may have been misunderstood as rate hikes for new members.
“We are growing, but not as fast as we would like or have been,” executives stated in the memo. “Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business.”
There’s one legit reason for at least some of the company’s optimism: At least Netflix still topped on actual earnings.
Wall Street had forecast two-penny earnings per share (EPS) on revenue of $2.11 billion, per a Yahoo Finance compilation. Streaming revenue came in a bit under $2 billion, though EPS hit 9 cents. Net income was $41 million for the most-recent 90 day period.
Earlier on Monday, Netflix announced it had acquired the exclusive international streaming rights to the upcoming CBS All Access “Star Trek” reboot.
Executives will host a conference call with media analysts shortly to discuss the quarterly results.