Fast Money Blog- 4/22/22
Without a doubt the biggest story on Wall Street this week was Q1 Netflix earnings. On Tuesday, April 19th Netflix, Inc. (NFLX) released its Q1 2022 earnings for the period ending March 31st. The company posted revenues of $7.8 billion, up 9.8% from year-ago revenues of $7.1 billion.
However, the most troubling news is that Netflix reported it lost 200,000 subscribers during the quarter, marking the first time in more than a decade that Netflix has lost subscribers. This decline brings Netflix’s subscriber base to 221.6 million, down from 221.8 million in the prior quarter. Netflix stock plunged over 35% since this news were released.
As you can imagine, the company blames many factors for its drop in subscribers, including competition in the streaming industry and widespread password sharing, as Netflix claims there are approximately 100 million people who are gaining access to Netflix through account-sharing.
Netflix also pointed to increasing inflation, continued disruptions from Covid, and Russia’s invasion of Ukraine as reasons for a loss in customer demand.
You know how I’m always telling you to watch top-line revenue growth? Well, when it comes to streaming services, you need to pay attention to top-line revenue growth AND subscriber growth. I expect to see NFLX shares continue to decline over the next 6 months. If you currently own shares it’s definitely time to sell.
Stay Patient. Stay Disciplined.
Tyrone Jackson
The Wealthy Investor