Netflix added 15.8 million paying customers globally in Q1 as people stayed home in line with confinement measures aiming to stop the spread of Covid-19 (coronavirus), but the company expected subscription growth to halve in the current quarter.
New global registrations grew 64 per cent year-on-year, taking its total paying user base to 182.9 million, up 22.9 per cent from its 148.8 million subscribers in Q1 2019.
In a letter to shareholders, Netflix noted additions surpassed its predictions, but didn’t result in higher-than-expected international revenue due to the appreciation of the US dollar compared with other currencies.
Netflix also said Covid-19 lockdowns had affected production and warned of delays in content release.
Revenue of $5.7 billion was up 27.6 per cent and net income rose to $709 million from $344 million in Q1 2019.
Future outlook
Netflix expressed hope confinement measures imposed to combat the pandemic would be lifted soon, and predicted viewing and membership numbers would drop as a result.
The company expected to add 7.5 million global paid subscriptions in the current quarter, but noted “uncertainty on home confinement timing” meant “this is mostly guesswork”.
It also forecast net additions in Q3 and Q4 to be lower compared to the same periods in 2019.
The streaming company maintained confidence it would hit a targeted 16 per cent operating margin in 2020, despite accumulating extra costs in Q1 due to moves around expanding its customer support team and the creation of a $100 million fund to aid the entertainment industry.
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