Netflix has warned that its lockdown-driven surge in subscribers is starting to peter out – even as it reported another quarter of bumper growth.
The streaming service added 10.1 million customers in the second quarter – beating expectations and meaning it has added 26 million so far this year, compared with 28 million for the whole of 2019.
However, it forecast that growth in subscribers would slow markedly to 2.5 million in the current July-September period, disappointing investors and sending shares 10% lower in after-hours trading.
In a letter to shareholders, Netflix said: “As we expected, growth is slowing as consumers get through the initial shock of COVID and social restrictions.”
The company had added a record 15.8 million customers in the first quarter.
In its latest update, Netlfix said “restrictions on what we do socially” had helped drive a “pull-forward” in subscription resulting in “huge growth in the first half of this year”.
“As a result, we expect less growth for the second half of 2020 compared to the prior year,” the company told investors.
The 26 million additions figure for January to June was more than double that of a year before while the 10.1 million reported for the second quarter was nearly four times better than in 2019.
That took its number of global paying customers to just under 193 million.
Profits were also up – $720m (£565m) for the latest quarter, which is nearly triple the level of a year earlier.
Netflix – known for shows such as The Crown, Tiger King and Money Heist – said it was slowly resuming production in many parts of the world, including Korea, Germany, Spain and the UK after it was shut down by the pandemic.
However, there was “more uncertainty” over filming in the US due to “current infection trends”.
The latest surge in customer numbers came even as Netflix is facing increasing competition from newly launched services such as Disney+.
But Sophie Lund-Yates, equity analyst at Hargreaves Lansdown, said they were not “an automatic cause for celebration”.
“Subscriber growth is set to decelerate from next quarter,” she said. “After all if you haven’t subscribed to Netflix during lockdown, the chances are you never will.”