Netflix lost 200,000 subscribers in the first quarter and predicts another 2 million in the current second quarter, according to the company’s first-quarter 2022 financial report on Tuesday.

Netflix reported in January that it had 221.84 million customers at the end of 2021. Netflix said its total dipped to 221.64 million subscribers over the three-month period ending March 31, which includes the premieres of ‘Bridgerton’ Season 2 and ‘The Adam Project.’

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According to FactSet, the streaming service originally predicted 2.5 million paid net adds in Q1, while Wall Street analysts expected Netflix to gain 2.8 million new members worldwide in the first quarter, compared to 3.98 million in the year-ago period. So while it was expected that it would perform poorly in comparison to past quarters, the fact that it actually lost subscribers is extremely shocking.

Netflix shares finished at $348.42 per share on Tuesday. Following the disclosure of Netflix’s Q1 subscriber loss and estimates for a larger loss in Q2, the stock plunged more than 22% in after-hours trading.

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Netflix’s first-quarter financial reports exceeded Wall Street’s forecasts for earnings but fell short on revenue. According to Refinitiv analyst consensus data, analysts expect earnings per share (EPS) of $2.89 on revenue of $7.93 billion. Netflix announced diluted earnings per share of $3.53 on revenue of $7.868 billion on Tuesday. Revenue increased 9.8 percent compared to the first quarter of 2021.

Operating income was reported as $1.97 billion, with a 25.1 percent operating margin. Netflix’s net income for the quarter was $1.6 billion.

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“Our revenue growth has slowed considerably as our results and forecast below show,” Netflix said in a letter to shareholders that accompanied its Q1 earnings release. “Streaming is winning over linear, as we predicted, and Netflix titles are very popular globally. However, our relatively high household penetration – when including the large number of households sharing accounts – combined with competition, is creating revenue growth headwinds. The big COVID boost to streaming obscured the picture until recently.”

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The statement continues, “While we work to reaccelerate our revenue growth – through improvements to our service and more effective monetization of multi-household sharing – we’ll be holding our operating margin at around 20%. Key to our success has been our ability to create amazing entertainment from all around the world, present it in highly personalized ways, and win more viewing than our competitors. These are Netflix’s core strengths and competitive advantages. Together with our strong profitability, we believe we have the foundation from which we can both significantly improve, and better monetize, our service longer term.”

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Netflix highlighted four causes for their subscriber decline:

“First, it’s increasingly clear that the pace of growth into our underlying addressable market (broadband homes) is partly dependent on factors we don’t directly control, like the uptake of connected TVs (since the majority of our viewing is on TVs), the adoption of on-demand entertainment, and data costs.”

“Second, in addition to our 222m paying households, we estimate that Netflix is being shared with over 100m additional households, including over 30m in the UCAN region.”

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“Third, competition for viewing with linear TV as well as YouTube, Amazon, and Hulu has been robust for the last 15 years. However, over the last three years, as traditional entertainment companies realized streaming is the future, many new streaming services have also launched.”

“Fourth, macro factors, including sluggish economic growth, increasing inflation, geopolitical events such as Russia’s invasion of Ukraine, and some continued disruption from COVID are likely having an impact as well.”