Netflix Beats Q2 Sub Forecasts 35%, Predicts Q3 Slowdown; Stock Falls

Netflix did 35% better than its April 21 projections when it delivered 10.1 million net subscriber additions globally in Q2. After Q1 Netflix subscriber net adds as COVID-19 lockdowns hit soared to 15.77 million, Netflix said then it expects viewing to decline and membership increases to slow down as “home confinement ends” (see 2004210059). “We live in uncertain times with restrictions on what we can do socially and many people are turning to entertainment for relaxation, connection, comfort and stimulation,” said a shareholder letter after regular U.S. markets closed Thursday. The first half had “significant pull-forward of our underlying adoption leading to huge growth,” it said. “We expect less growth for the second half of 2020.” It’s forecasting 2.5 million net subscriber adds globally for Q3, compared with 6.8 million in Q3 a year earlier. “Instead of worrying” about all the new competition in the streaming space, “we continue to stick to our strategy of trying to improve our service and content every quarter faster than our peers,” it said. The stock fell 9.9% to $475.40 in after-hours trading. The company also promoted two executives (see personals section, this issue.)