Netflix added more subscribers than analysts had expected at the end of last year, despite the debuts of several rival streaming services.
The streaming giant added 8.76m paid subscribers globally in the three months to December, compared with analysts’ average estimate of 7.63m, thanks to hits such as the Irishman and the third season of the Crown.
It reported $5.47bn in revenue for the quarter, a rise of 31 per cent year on year, compared to the $5.45bn analysts polled by Refinitiv had expected. Profit came in at $1.30 per share, or $458.5m.
Netflix’s share price initially slid as much as 2.5 per cent in after-hours trading, as its guidance for the first quarter of 2020 took investors by surprise. It later bounced back to jump more than 2.3 per cent.
The firm forecast earnings of $1.66 per share on revenue of $5.73bn for the current period, compared to analyst expectations for earnings of $1.20 per share and $5.76bn in revenue.
Growth slowed in North America, as Netflix added 420,000 US subscribers in the fourth quarter, below market estimates of 659,600.
“There’s a fine juggling act by raising revenue through price increases vs. retaining subscribers,” said telecoms analyst Paolo Pescatore.
“This could backfire as many of the new and forthcoming video streaming services are cheaper than Netflix. This makes Netflix vulnerable in its home market where it stands to lose out, quite considerably as underlined by these latest results.”
The final three months of 2019 saw the launch of rival services Disney Plus and Apple TV Plus, while the debuts of HBO Max and Peacock remain on the horizon.
In a letter to shareholders, Netflix included research on Google searches for various shows that debuted in the quarter, including its own series The Witcher, Disney’s The Mandalorian, Amazon’s Jack Ryan and Apple’s The Morning Show.
The data showed The Witcher pulling ahead in user searches, indicating the show’s popularity — though the Mandalorian debuted later in the month.
“We have a big headstart in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years — pleasing members,” the firm said. “We believe if we do that well, Netflix will continue to prosper.”
For 2019 as a whole, Netflix reported $20.2bn in revenue and $2.6bn in profit, compared to $15.8bn and $1.6bn a year earlier respectively.