U.S.-Canada paid subscriptions hit 73 million
LOS GATOS, Calif. — Netflix’s paid memberships in the U.S.-Canada (UCAN) market has reached more than 73 million, but overall the company’s global subscription net additions fell short of expectations in its third quarter of 2020, according to financial results released by the company on Tuesday.
In the three months ended September 30, Netflix’s paid membership net adds were 2.2 million, compared to its 2.5 million guidance for the quarter, the company says in a letter to its shareholders. As well, its Q3 2020 paid net additions were substantially down from the 6.8 million net adds in its third quarter of 2019.
But, the pandemic…
“We think this is primarily due to our record first half results and the pull-forward effect we described in our April and July letters. In the first nine months of 2020, we added 28.1m paid memberships, which exceeds the 27.8m that we added for all of 2019. In these challenging times, we’re dedicated to serving our members,” reads the letter to the company’s shareholders.
The company’s total global paid membership now exceeds 195 million subscribers in more than 190 countries. Its UCAN market is still its largest subscriber base at 73.08 million paid members, which grew by only 180,000 net adds in Q3 2020. The Asia-Pacific (APAC) region was the largest contributor to the company’s Q3 2020 membership net additions in the quarter, with 1 million net adds (46% of its Q3 global paid net adds).
“For Q4 ’20, we forecast 6.0m paid net adds vs 8.8m in Q4 ’19. As we have highlighted in our recent investor letters, we believe our record first half paid net additions would result in slower growth in the back half of this year. If we achieve our forecast, it will put us at a record 34m paid net adds for 2020, well above our prior annual high of 28.6m in 2018,” says the letter.
Netflix’s total revenue for Q3 2020 was $6.44 billion, a 22.7% increase over its $5.25 billion in revenue in the third quarter of 2019. Revenue in the UCAN region was $2.93 billion in Q3 2020, compared to $2.62 billion in Q3 2019. The company experienced a 2% year-over-year increase in streaming ARPU in the UCAN region in Q3 2020, although its overall streaming ARPU decreased 1.6% year over year in the quarter.
The company’s overall net income was $790 million for the third quarter of 2020, up from its net income of $665 million in the same quarter of 2019. Its adjusted EBITDA was $1.45 billion in Q3 2020, compared to $1.11 billion in Q3 2019.
“We are making good and careful progress returning to production, particularly in EMEA and APAC, but also across much of LATAM and UCAN. We’ve restarted production on some of our biggest titles including season four of Stranger Things, action film Red Notice (starring Dwayne Johnson, Gal Gadot and Ryan Reynolds) and The Witcher season two. Since the almost-global shutdown of production back in mid-March, we have already completed principal photography on 50+ productions and, while the course and impact of Covid-19 remains unpredictable, we’re optimistic we will complete shooting on over 150 other productions by year-end,” states the letter to shareholders.
For more information about Netflix’s Q3 2020 financial results, please visit the company’s investor relations website here.
