Netflix's fourth-quarter revenue was $5.47 billion, with nearly 8.76 million new paying subscribers

Faced with strong competitors such as Disney and Apple that have recently tried their hand at streaming services, Netflix's performance has not reassured investors.

The financial report released after the market closed on Thursday, Eastern Time, showed that in the fourth quarter of 2019, the growth of subscribers in global markets outside the United States was better than expected, but in the United States, facing the Disney streaming service Disney Plus and Apple's Apple TV Plus, which were both launched in November last year, Netflix's user growth was significantly lower than expected, 30% less than market expectations. Netflix's expected increase in new users in the first quarter of this year was 11% less than market expectations.

The main data of the financial report are as follows:

Netflix's net increase in paid subscribers in the fourth quarter was close to 8.76 million, while the company's own forecast was 7.60 million and the market consensus forecast was 7.65 million.

In the fourth quarter, Netflix added 420,000 new paying subscribers in the U.S. market, while the market expected 602,250 and Netflix itself expected 600,000. In the same quarter, the number of new subscribers in overseas markets outside the U.S. increased by 8.33 million, while the market expected 7.15 million and Netflix expected 7 million.

Netflix's operating revenue in the fourth quarter was US$5.47 billion, while the market expected US$5.45 billion and Netflix's expectation was US$5.4 billion.

Netflix's GAAP earnings per share (EPS) in the fourth quarter was $1.3, while the market expected $0.53 and Netflix had previously expected $0.51.

Netflix said that except for the United States and Canada, the net increase of paying users in other regions of the world has reached a new high. Most of the new users are in overseas regions, with a total of 106 million paying users overseas.

In terms of performance guidance, Netflix expects EPS of $1.66, operating income of $5.73 billion, and 7 million new paying subscribers in the first quarter of 2020, while analysts expect EPS of $1.20, operating income of $5.76 billion, and 7.86 million new subscribers.

Netflix also expects a net outflow of free cash flow of $1.7 billion in the first quarter and approximately $2.5 billion for the full year 2020, but still hopes to "slowly move" toward net cash flow inflows in the future.

Netflix explained in a letter to shareholders that the slow growth of users in the United States and Canada is due to Netflix's recent price increase and the recent launch of competing streaming platforms. Outside the United States, the impact of competing products is even weaker.

The comments pointed out that it is worth mentioning that Netflix's rivals such as Disney have not yet launched streaming media competitors on a global scale.

Public reports show that in addition to the United States, Disney Plus has now landed in Canada, Australia and New Zealand, and will land in the United Kingdom, France, Germany, Italy, Ireland, Spain, Austria and Switzerland on March 24. Apple TV+ currently covers more than 100 countries and regions. Netflix is ​​currently available in more than 190 countries, and its standard package in the United States costs $13 per month. Apple TV+ costs $5 per month, and some Apple devices can enjoy a year of free service. Disney+ costs $7 per month in the United States and Canada, and the package bundled with ESPN+ and Hulu costs $13 per month.

Haris Anwar, an analyst at investing.com, commented that the massive content and marketing budgets of streaming services are only justified if there is strong growth in new subscribers. If such user growth cannot be achieved, the stock price will reflect the reality of burning money.

After the fourth quarter financial report was released, Netflix's stock price fluctuated after the market. The decline first expanded rapidly, falling by more than 1% at one point, and then turned to rise. At the time of writing, it had risen by more than 2% after the market.