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Business News/ Markets / Stock Markets/  Netflix shares fall 7% as decision to not disclose subscriber additions sparks growth concerns
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Netflix shares fall 7% as decision to not disclose subscriber additions sparks growth concerns

Netflix's stock has surged in recent months, currently trading close to the upper limit of its 52-week range.

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Netflix

Netflix share price fell as much as 6.8 per cent on Friday on NASDAQ following a surprising announcement that it would cease disclosing subscriber additions and average revenue per member starting in 2025.

This decision has raised concerns among investors regarding potential growth plateaus in certain markets for the streaming giant, according to Reuters report.

The choice to withhold essential metrics that have influenced the stock market coincides with the anticipation among Wall Street analysts that subscriber growth for Netflix in North America and Europe is nearing saturation.

Also read: Netflix Adds 9.33 Million Customers, Crushing Street Forecasts

As per Blommberg report, the company approximated that over 100 million individuals were utilizing an account without payment. Despite concerns among Netflix executives regarding potential customer dissatisfaction, the company has successfully persuaded millions of freeloaders to subscribe and pay for access.

Other than Netflix, Meta's Facebook and the social platform X, among other technology companies, had previously halted the reporting of monthly active users due to slowing growth.

In the initial quarter, Netflix welcomed new customers; however, its revenue projection for the second quarter fell short of market anticipations, coming in below the expected $9.54 billion, as announced late Thursday. Additionally, the company opted not to disclose figures regarding subscriber growth and average revenue per member for the first quarter of 2025.

Also read: Netflix to shift focus from viewer count to engagement metrics

Netflix further reported that its ad-supported streaming options played a significant role in drawing in 9.3 million new customers, nearly twice the forecast agreed upon by analysts surveyed by LSEG. This surge brings the global subscriber count to 269.6 million by the end of March.

Netflix's stock has surged in recent months, currently trading close to the upper limit of its 52-week range. Analysts on Wall Street cautioned that the elevated expectations prior to the earnings report could pose a potential risk to the stock price.

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Published: 19 Apr 2024, 08:26 PM IST
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