Netflix NFLX doubled its own subscriber growth estimates in the first quarter, boosted by the initial shock of the early lockdown period, and followed that performance up with another big subscriber beat in Q2. The streaming TV firm has been at the forefront of the next wave in entertainment for years and now the coronavirus has seen Hollywood push back nearly all of its theatrical releases, which could benefit Netflix.
So let’s see what to expect from Netflix’s third quarter results that are due out on October 20, and try to help investors determine if it’s still time to buy NFLX for the long-haul…
The Only Game in Town
Netflix added 15.8 million paid users around the world in Q1 to crush its 7 million guidance that it provided before the coronavirus changed things dramatically. NFLX then pulled in over 10 million in the second quarter to blow away its own 7.5 million projection.
The streaming company added 26 million paid subscribers during the first two quarters of FY20, which is just 10% less than it accumulated in all of 2019. Netflix closed last quarter with 192.95 million global paid subscribers.
The coronavirus has created a unique situation. There are hardly any movies in theaters and the release dates are being pushed back by months and even years, until studios feel confident people will show up to crowded theaters.
The early numbers suggest this will take a while. And Regal Cinemas, which is the second-largest U.S. cinema chain, recently announced that it’s closing its doors again, not that long after reopening, citing some of the aforementioned problems. This creates a chance for streaming to thrive even more.
The largest streaming TV firm in the world does face competition from newcomers such as Disney+ DIS and Apple TV+ AAPL, as well