Netflix said on Tuesday it added millions of new subscribers globally over the past quarter as it ramped up for a tougher competitive landscape, but scaled back its outlook for early 2020.
The global streaming television giant largely beat expectations with a profit of $587 million in the fourth quarter as revenue rose 31 percent from a year ago to $5.5 billion.
Netflix added a better-than-expected 8.8 million subscribers worldwide to hit 167 million, but growth in North America was below forecasts with 550,000 new members, including 420,000 in the United States.
After-hours trading showed Netflix shares in a narrow range, dipping slightly and then rising about 0.1 percent.
Netflix said it expects to add around seven million new subscribers in the first quarter of 2020, well below the level of a year ago, citing “slightly elevated churn levels” in the United States.
The California-based company scaled back expectations in the current quarter, with nascent services such as Apple TV+, Disney+ and soon-to-launch rivals such as Peacock competing for viewers.
“Many media companies and tech giants are launching streaming services, reinforcing the major trend of the transition from linear to streaming entertainment,” Netflix said in a letter released with the earnings figures.
“We have a big head start in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years - pleasing members.”
Netflix, whose hit shows include “The Crown,” and “Stranger Things,” is expected to face tougher competition in the US market but is strong in many global markets, having bolstered its lineup of international shows.
Analyst Eric Haggstrom of eMarketer said Netflix “ended 2019 on a strong note with new subscriber additions above expectations” but that it faces challenges ahead.
“Netflix will need to continue to produce hit shows as Disney, Apple, HBO and others launch and scale new services,” Haggstrom said.
“Netflix’s scale allows it to reach mass audiences, which makes it easier for them to create hits when compared to newcomers to the market.”