Netflix earnings on Tuesday held no real surprises for Wall Street. Global subscriber growth surged to 15.8 million, obliterating analyst expectations as fiercely as Joe Exotic's tigers tearing into a hunk of raw meat.
After all, the world is on lockdown amid the coronavirus pandemic and Netflix has dominated a captive audience looking for content. The streaming behemoth itself even acknowledged that fact in its quarterly letter to investors that it is likely riding a somewhat unsustainable wave.
"We expect viewing to decline and membership growth to decelerate as home confinement ends, which we hope is soon," the company wrote.
Despite the rosy subscriber figures, Netflix's earnings per share fell short of expectations, which the company ascribed to a strengthening U.S. dollar that weakens its international might, along with the various relief efforts that it has helped fund to the tune of $150 million.
One big question facing Netflix and its competitors is whether its content offering can sustain viewership despite production halts at the front of its pipeline. The company acknowledged "significant disruption" but also touted that its animation, post-production, and writing teams have been able to operate remotely.
Netflix listed three "primary effects" of the crisis on its finances: the accelerated user growth due to confinement; lower-than-expected international revenues due to currency shifts; and an improved free cash flow due to title-release delays ("typically by a quarter") and cutbacks on spending for new content.
Netflix's share price was up 31.5% year-to-date as of the market's close on Tuesday. The S&P 500 index is down about 16% over the same period.