Netflix started the year with another explosion in subscriber growth that eclipsed analyst projections for the third consecutive quarter, providing further evidence that the video streaming service has regained its momentum after a jarring decline in customers caused a shock.
Netflix’s gain of 1.75 million subscribers reported Tuesday for the January-March period was nearly 550,000 more than the average estimate among analysts polled by FactSet.
While the increase in subscribers was smaller than Netflix’s historically reported for the first quarter, it was in stark contrast to the loss of 200,000 subscribers the Los Gatos, California-based company suffered in the same period last year. .
Netflix earned $1.3 billion, or $2.88 per share, in the first quarter, an 18% decline from the same period last year. Even so, the per-share figure was slightly higher than analysts’ forecasts, according to FactSet. Revenue was up 4% from last year to $8.16 billion, a notch below analyst estimates.
The unexpected erosion, which marks Netflix’s first quarterly losses in more than a decade, prompted management to roll out a lower-priced version of its service that includes commercials and initiate a crackdown on password sharing that is being set in stages.
Management also stopped estimating how many subscribers it would garner from quarter to quarter in an effort to get Wall Street to focus more on its financial results rather than the size of its audience.
Netflix also announced it’s shutting down the DVD-by-mail service that launched the company a quarter century ago. The service, which boasted more than 16 million U.S. subscribers, has been steadily declining over the past decade and only generated $145.7 million in revenue last year.