The Company’s Earnings Release — March 31, 2020

Netflix rebounds from recent subscriber losses with 3Q gain

The company reported a 2.0% gain in core subscribers during the third quarter of the year, though there was a notable decline in paid subscribers as well, which has now returned to some of the levels seen in the second quarter.

In addition to a net loss in total subs, the company saw a net gain in unweighted members, both in paid and unweighted bases, with the latter number coming in at just shy of a 1.0% decline.

“During the third quarter, we experienced continued growth in both total members and our core paid subscribers compared to the second quarter,” the company explained in a company earnings release.

“Total members grew 1.6 million, bringing our total member base to more than 8.3 million. Paid subscribers continued to grow, increasing 600,000 in the third quarter, bringing us to 8.5 million paid members. With these growths, pay-monthly and unweighted paid grew 22% and 32%, respectively. The unweighted paid membership group increased 1.2 million during the third quarter, bringing us to 9.5 million.”

With the third quarter being slightly lower than the 1.1 million increase in total members seen in the second quarter, the company’s core paid subscriber gains were again driven by an increase in paid members who purchased a paid subscription.

With the paid subscriber numbers returning to similar levels to what was seen in the second quarter, the continued growth of total members and paid subscribers is likely a result of the “increased number of new subscribers, coupled with the continued growth of existing subscribers.”

In line with the paid subscribers uptick in the third quarter came a decrease in the amount of churn, meaning there were less defections in paid subs from subscribers who hadn’t paid.

“As a percentage of total subs, churn was 8.8% in the quarter, down from 9.6% in the second quarter and 10.6% in the first quarter. We experienced decreases in total membership from new and existing members that were both attributable to the continued growth of subscribers and to the fact that some existing members who had

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