Stock falls after company projects 2.5M paid net adds for Q1 2022
LOS GATOS, Calif. – Netflix announced yesterday its fourth quarter 2021 financial results, which shows the company added 1.2 million paid subscribers in the U.S./Canada (UCAN) region for the quarter ended Dec. 31.
This is compared to 0.9 million for the same quarter the previous year. (See chart below.)
Q4 2021 was the “strongest quarter of member growth in this region since the early days of Covid-19 in 2020,” reads a letter to Netflix shareholders published yesterday with the company’s financial results.
Netflix also reported its revenue in the region for Q4 2021 increased to $3.3 billion compared to $3 billion in Q4 2020.
Netflix has continued to grow globally – over 90% of its 18 million total paid net adds for 2021 were from outside of the U.S. and Canada, according to the shareholder letter.
The company also reported revenue and operating income both grew last year. “Full year revenue of $30 billion grew 19% year over year while operating income of $6.2 billion rose 35% year over year,” the letter says. (Dollar amounts are in USD.)
Netflix further reported it finished 2021 with 222 million paid memberships, including 8.3 million paid net adds in Q4.
“Even in a world of uncertainty and increasing competition we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world,” the shareholder letter says.
The streamer, however, forecast 2.5 million paid net adds for Q1 2022, which is down from 4 million for the same quarter the previous year.
“Our guidance reflects a more back-end weighted content slate in Q1’22 (for example, Bridgerton S2 and our new original film The Adam Project will both be launching in March),” the letter to shareholders reads.
“In addition, while retention and engagement remain healthy, acquisition growth has not yet re-accelerated to pre-Covid levels. We think this may be due to several factors including the ongoing Covid overhang and macro-economic hardship in several parts of the world like LATAM (Latin America).”
The Wall Street Journal reported the company’s stock fell 20% yesterday in after-hours trading.
For Netflix’s Q4 2021 financial results and letter to shareholders, please click here.
Chart borrowed from Netflix’s letter to shareholders.
