Shares of Netflix cratered more than 35% on Wednesday after the streaming giant reported lackluster quarterly earnings that showed its first subscriber loss in more than a decade—with the company warning that it expects to lose even more in the months ahead.
Netflix’s stock plunged over 35% following the company’s first-quarter earnings report late on Tuesday, with revenue and subscriber growth both coming in below expectations.
The streaming giant reported quarterly revenue of $7.78 billion, up 10% from last year (compared to the $7.93 billion expected), but what really spooked investors was that Netflix lost 200,000 subscribers globally in the first quarter—far below the 2.7 million additions expected.
Worse yet, the company expects to lose another 2 million subscribers this current quarter, as it blamed password sharing and increased competition from rival streaming services for slowing revenue growth.
Netflix also said that suspending its service in Russia resulted in a loss of 700,000 subscribers, but even without that unforeseen circumstance, the company would still have only added 500,000 net additions last quarter.
After the recent subscriber loss, Netflix now has some 221.6 million paying customers globally, which is down from 221.8 million in the fourth quarter of 2021.
Netflix co-CEO Reed Hastings, meanwhile, said that the company would explore offering lower-priced, ad-supported subscription tiers in a bid to attract more new customers.