Netflix (NASDAQ:NFLX) shares dropped around 20% after-hours following the company’s reported Q1 results, with global streaming paid net additions coming in at -200,000 million, compared to 2.5 million expected.
This was a result of the suspension of service in Russia and winding-down of all Russian paid memberships, which impacted the net additions by 0.7 million.
Excluding this impact, net additions in Q1 totaled 0.5 million. According to the company, the main challenge for membership growth is the ongoing soft acquisition across all regions.
Q1 EPS came in at $3.53, beating the consensus estimate of $2.90.
Revenue grew 10% year-over-year to $7.87 billion, compared to the consensus estimate of $7.93 billion, driven by an 8% increase in average streaming paid memberships and a 2% increase in average revenue per membership (ARM).
The company expects Q2/22 EPS to be $3.00, compared to the consensus of $3.01, and revenue to be $8.05 billion, compared to the consensus of $8.21 billion.
The company guided to a drop of 2 million global streaming paid net additions in Q2, compared to the consensus of a gain of 2.4 million.