After seeing explosive subscriber growth during the earlier stages of the pandemic last year, Netflix saw the other side of it in Q1 2021 as sub growth slowed dramatically during a period that also saw Netflix's pipeline of fresh content slow.

Netflix added about 3.98 million net new subs in Q1 2021, up 13.6%, extending its global total past 207.64 million. However, that result missed guidance of 6 million net additions. Netflix added a whopping 16 million net new paid streaming subs in the year-ago quarter. Netflix pulled in Q1 revenues of $7.16 billion, up 24.2%, and beat guidance of $7.12 billion.

Figure 1: Netflix expects a sluggish Q2, forecasting it will add 1 million paid subscribers worldwide, extending its grand total to 208.64 million.
(Image source: Netflix)

Netflix subscriber growth dipped across all regions:

Netflix shares were down $61.12 (11.12%) to $488.45 in after-hours trading Tuesday.

Netflix attributed the subscriber slowdown to a big "pull forward" in 2020 spurred by the pandemic along with a lighter content slate in the first half of this year caused by production delays in all regions. Netflix said it expects a "strong second half" amid the return of new seasons of popular shows along with a slate of new movies. Production is now back in every major market, save for Brazil and India, the company said, noting it will spend over $17 billion on content in 2021.

"We don't believe competitive intensity materially changed in the quarter or was a material factor in the variance as the over-forecast was across all of our regions," Netflix explained in its Q1 2021 investor letter (PDF).

Netflix forecasts Q2 2021 revenues of $7.3 billion, up 18%, and expects to add 1 million paid net adds, taking its grand total to 208.64 million.

— Jeff Baumgartner, Senior Editor, Light Reading