Having millions of people stuck inside all day seems to have worked out for Netflix, at least, with the streaming giant easily setting a new quarterly record with 15.8 million new subscribers adding the service during Q1, the company reported on Tuesday afternoon.
Netflix’s big quarter eclipsed its previous record of 9.6 million new subscribers, set during the first quarter of 2019. Analysts had projected the company would add around 9 million new subs — with most projections inching higher in recent weeks, due to stay-at-home measures being taken to counteract the spread of COVID-19. Overall, the company now has nearly 183 million subscribers.
The service was helped out during Q1 by the early return of “Ozark,” which has typically been a summer release in the past, and the debut of “Tiger King,” which was the top-ranked show or movie on Netflix for 25 straight days. On Tuesday, Netflix reported 64 million accounts watched “Tiger King” within its first 4 weeks. (Reminder: Netflix counts a view after someone has clicked and watched a show for at least two minutes.)
“Like other home entertainment services, we’re seeing temporarily higher viewing and increased membership growth,” the company said in its letter to shareholders. “In our case, this is offset by a sharply stronger US dollar, depressing our international revenue, resulting in revenue-as-forecast. We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon.”
For the first quarter, Netflix reported revenue of $5.77 billion — matching analyst projections — and earnings per share of $1.57, which fell about 8 cents shy of analyst estimates. Sales increased nearly 28% year-over-year.
Netflix was already enjoying a strong run heading into Tuesday afternoon, with its stock price increasing more than 20% in the last month. During that time, Netflix has also leapfrogged Disney in terms of valuation, with the Los Gatos, California-based company now worth about $193 billion.
After sharing its Q1 report, Netflix’s shares increased 3% in early after-hours trading to $446.38 per share.
Netflix’s Q1 subscriber gains included 2.3 million new customers signing up in the U.S. and Canada, which marked its best domestic growth in more than a year. The company added 2.9 million new subscribers in Latin America, 3.60 million in its Asia-Pacific market, and nearly 7 million spread across Europe, the Middle East and Africa.
Moving forward, the company said in its letter to shareholders it expects shutting down production on several shows and movies will have a “modest impact” on its Q2 release strategy.
“No one knows how long it will be until we can safely restart physical production in various countries, and, once we can, what international travel will be possible, and how negotiations for various resources (e.g., talent, stages, and post-production) will play out,” Netflix said in its letter. “The impact on us is less cash spending this year as some content projects are pushed out. We are working hard to complete the content we know our members want and we’re complementing this effort with additional licensed films and series.”
Netflix anticipates it will add 7.5 million new subscribers during Q2, although it admitted this is “mostly guesswork” because of the economic uncertainty brought on by COVID-19.
The company will hold a video conference call at 3:00 p.m. PT to discuss its earnings.