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Quarantine leads to record growth of Netflix subscribers

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Quarantine leads to record growth of Netflix subscribers
April 22
13:00 2020

Netflix is the world’s largest subscription streaming service. It was expected that during the time of universal quarantine, things would go well for the American corporation. But no one could have imagined that the company would get such a huge number of new subscribers. It became known that in the first quarter of this year, the number of paid users of the service has increased 15.77 million people. This is an absolute record!

Prior to this figure, the growth recorded in the first quarter of last year was considered a record. Then the company managed to attract 9.6 million new subscribers.

Quarterly results have surpassed the most ambitious forecasts. Analysts believed that the indicators would increase 8.22 million, the company’s representatives themselves believed that from January to March the company would be able to attract about 7 million new subscribers.

For the quarter, the company’s net profit almost has doubled to $ 709 million ($ 1.57 per share). The revenue has amounted to 5.77 billion US dollars. The consensus forecast was not right as it was assumed that the profit would be equal to $ 1.64 per share, and the revenue would total $ 5.75 billion.

Immediately after the publication of financial reports Netflix securities soared by 9%. The shares of the American service managed to break the price record; quotes reached a historic high of $ 437.49.

Analysts at the company believe that such a fast growth rate of new users will not last long. When the key countries succeed in defeating coronavirus, the subscriber growth will decline. A Netflix press release said the company expected 7.5 million new paid subscriptions in the second quarter.

Europe and the Middle East (+7 million) are the main users of the service in the USA and Canada the indicator has increased 2.3 million, in Latin America – 2.9 million.

Since the beginning of the year, Netflix capitalization has increased one third the rally will continue.

 

The material was prepared with the participation of Katya Wilson,
a leading analyst of the brokerage company UFT Group

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