Stay-At-Home Boosts Netflix Q1 Subscribers: ETFs To Buy

Netflix (NFLX - Free Report), the world's largest video streaming company, posted its strongest ever financial results with a record 15.77 million paid subscriber additions – double the analyst forecast. The huge gain came amid the coronavirus crisis, which has resulted in social distancing and stay-at-home mandates, pushing up demand for streaming services. The company lagged earnings estimates but outpaced on revenues.

Shares of Netflix initially jumped as much as 12% before settling to less than 1% gain in after-market hours.

Netflix Q1 Earnings in Detail

The company reported earnings per share of $1.57, falling short of the Zacks Consensus Estimate by 4 cents but improving from the year-ago earnings of 76 cents. Revenues climbed 27.6% year over year to $5.77 billion and came in above the Zacks Consensus Estimate of $5.70 billion.

Netflix added 15.77 million new subscribers globally in the first quarter, up 22.8% from the year-ago quarter and edged past its own expectations of 7 million additions. The growth was mainly boosted by binge-watching of “Tiger King” and “Love Is Blind” to ride out the quarantine in March. Other content like Ozark season 3 and season four of Spanish-language thriller Money Heist also kept Netflix a busy platform. Netflix now has 182.9 million paid subscribers worldwide, with more than 100 million outside the United States.

Netflix expects viewership and subscriptions to spike this quarter, but also warned of an expected decline in viewership and slowdown in growth if when lockdown orders around the world are lifted. It expects to add 7.5 million global subscribers in Q2 but see a weaker second half.

In the second-quarter 2020, the online video streaming giant is looking forward to releasing all of its originally planned shows and films since their filming was completed. It plans to launch a new original comedy series Space Force, and the Michael Jordan documentary The Last Dance. It just launched a buzzy unscripted series Too Hot to Handle. Netflix will also premiere Hollywood from Ryan Murphy, and Extraction, a large-scale action film. Further, the company is finding ways to bolster its programs this year with the recent acquisition of Paramount’s and Media Rights Capital’s The Lovebirds, a comedy starring Issa Rae and Kumail Nanjiani for the second quarter, and Legendary Pictures’ Enola Holmes starring Millie Bobby Brown, Helena Bonham Carter, Henry Cavill, and Sam Claflin, for the third quarter.

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