Netflix loses $16 billion in market value following earnings miss

Shares of Netflix fell more than 10% Thursday after the company reported a loss in domestic paid subscribers for the first time in eight years.

Netflix lost more than $16 billion from its market cap following the report, bringing it just below $142 billion. The stock is still up 20% so far this year.

Netflix reported an earnings beat of 60 cents per share compared to the Refinitiv consensus estimate of 56 cents and narrowly missed revenue estimates of $4.93 billion, reporting $4.92 billion in revenue for the quarter. But its paid subscriber net additions fell far from even Netflix’s own expectations. The company forecast 5 million global net adds for the quarter, but only saw 2.7 million.

Netflix lost paid subscribers in the U.S. for the first time since 2011, when its price increases alongside a new plan to split its DVD shipping service from streaming caused customer backlash. Netflix blamed regional price increases, a relatively weak content slate and a “pull-forward effect” of its strong first quarter subscriber growth.

While international paid subscribers still grew, the company widely missed estimates. Netflix reported international paid subscriber net adds of 2.83 million compared to estimates of 4.81 million, forecast by FactSet. The miss is significant for Netflix, which has pinned much of its growth opportunity to international expansion in highly populated regions.

Still, Netflix is hopeful about the upcoming quarter. The company forecast 7 million paid net adds and revenue of $5.25 billion. Netflix predicts strong viewership of its new seasons of “Stranger Things,” “The Crown,” and “Orange is the New Black,” among other hits will help buoy its subscriber growth.

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