Netflix (NFLX) missed expectations on its subscription numbers when it reported earnings on Monday, with total streaming adds of 5.14 million versus analysts’ expectations of 6.27 million.
Stock was down more than 13% in after-hours trading.
“We had a strong but not stellar Q2, ending with 130 million memberships,” the company said in a letter to shareholders on Monday.
The Los Gatos, California-based streaming giant on Monday afternoon reported second-quarter earnings of $.85 EPS on revenues of $3.91 billion versus analysts’ expectations of $.79 on revenues of $3.94 billion.
The company’s stock had previously surged nearly 146% over the last 12 months, driven by strong revenues and consistently higher-than-expected subscriber growth. For instance, the company added 7.41 million subscribers worldwide in the first quarter of this year, neatly surpassing the 6.5 million generally expected for the period.
A significant chunk of subscriber growth can be attributed to Netflix’s original content efforts. As Yahoo Finance previously reported, Netflix plans on spending roughly $2 billion on original content for 2018 — 25% of the $8 billion it spends on all content.
Netflix plans to release roughly 1,000 original series and films by the end of the year.
Of growing concern: slowly increasing competition from rivals such as Hulu and Amazon Prime, with Disney (DIS) launching a streaming service in 2019 and AT&T (T) also reportedly exploring a service of its own. Disney, in particular, could prove a viable rival to Netflix, given the company already owns the rights to coveted properties from Marvel, “Star Wars,” and Pixar.
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