Netflix’s slump continues as company loses 1 million users in second quarter
Netflix reported better-than-expected earnings on Tuesday, seeing a smaller exodus of viewers than originally forecast even as the platform struggles to maintain its meteoric pandemic growth.
Though Netflix reported its second straight quarterly drop in subscriber growth, and lost 1 million viewers in the second quarter of 2022, that number was lower than the 2 million it had projected in its previous report. Shares were up 10% in after-hours trading.
Netflix’s total revenue for the first quarter of 2022 was $7.97bn,missing analysts’ expectations of $8.04bn. In a letter to investors, Netflix said generating more revenue growth is a current focus.
“Our challenge and opportunity is to accelerate our revenue and membership growth by continuing to improve our product, content and marketing as we’ve done for the last 25 years, and to better monetize our big audience,” the letter said.
Tuesday’s report is the first since April, when the company’s value dropped 35% after Netflix revealed it had lost more than 200,000 subscribers in the first three months of the year.
The report did not address concerns of more layoffs, after the company cut 150 jobs in the previous quarter. Other major tech companies, including Spotify and Google’s parent company, Alphabet, have announced hiring slowdowns and layoffs in recent weeks.
Netflix and other streaming companies experienced explosive growth early in the pandemic, when millions were stuck in lockdowns, but the company has struggled to maintain its trajectory. It added more than 36 million subscribers during the first year of the pandemic and its share rose 86% from the end of 2019 through 2021, while the S&P 500 climbed 48%.
Netflix’s earnings report comes amid a wider downturn in the tech
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