Netflix has released its second quarter financial results, with the streaming behemoth missing its own subscriber growth predictions both in the US and internationally.
According to Reuters, the news sent its shares tumbling 8% in after-hours trading on Monday.
The business previously indicated that it was expecting to grow its subscribers by 2.5 million across the board, however this quarter saw Netflix add only 1.7 million subscribers.
Its initial prediction was off the back of expecting to gain an additional 500,000 subscribers in the US and two million internationally, however this quarter it reported gaining 160,000 new members in the US and 1.52 million members internationally.
In an announcement to its shareholders Netflix said: “We are growing, but not as fast as we would like or have been. Disrupting a big market can be bumpy, but the opportunity ahead is as big as ever and we continue to improve every aspect of our business.”
One reason Netflix gave for not reaching its subscriber goal was due to its recent price increase and subsequent un-grandfathering of some of its membership base.
Netflix says however the churn of members linked to un-grandfathering is in-line with its expectations and the overall revenue it will generate from the project will be invested back in content, which in the long run will satisfy members.
When it comes to earnings, Netflix again came in under forecast, with the streaming service generating a net income of USD$41 million against a forecast of USD$47 million. International revenue however rose 67% year-on-year, this follows the service revealing in January that is was set to go live in 130 new countries around the world.
Locally, Netflix is the dominant streaming player, with the latest figures from Roy Morgan indicating that Netflix is well and truly leading local rivals Stan and Presto. In Australia, Netflix has 1,87m subscribers versus Stan with 500,000 and Presto with 142,000.
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