Netflix Inc. (NASDAQ:NFLX) continues to benefit from the shelter in place as it continues to grow the number of its subscribers as it names Ted Sarandos as Co-CEO.
Netflix gained 10.1 new paid subscribers in Q2
The content streaming platform indicated that in the second quarter, it gained 10.1 million new subscribers, surpassing the estimated 7.5 million it had projected at the beginning of this year. However, the growth has slowed compared to Q1 when the company added 16 million new subscribers who were greatly due to the lockdown measures to combat the spread of COVID-19. Netflix has noted that it has added around 26 million new paying subscribers in the first two quarters of this year compared to 28 million for 2019.
Its Q2 revenue grew 25% YoY but missed estimates for the quarter. Although the company is proud of the exceptional performance posted in the first two quarters this year, executives warn investors not to read too much into it. In Q3, Netflix expects to add 2.5 million subscribers, a drop from the 6.8 million gained in Q3 2019. In a letter to shareholders, the company indicated that they expect slow growth in the 2H 2020 relative to last year.
Sarandos rewarded as Co-CEO because of his role in Netflix’s growth
The move to elevate Sarandos into Co-CEO positions him to succeed current CEO and Chairman Reed Hastings eventually. In a letter to shareholders, Hastings indicated that the change formalizes what was informal about the sharing of Netflix leadership. According to the lead independent director, Jay Hoag, the move is in the right direction of ensuring that the company’s management structure evolves to serve best shareholders and clients going forward.
Sarandos’ appointment is an indication of the huge role he has played in the last ten years in the meteoric growth of the company. He has been the brain behind the company’s success original programming strategy as the lead content officer. Netflix has emerged as a prolific content producer as well as an Academy and Emmy awards contender.