1 Reason Netflix Will Beat Subscriber Expectations Again This Quarter

Netflix (NASDAQ: NFLX) blew away expectations for net subscriber additions in the first quarter. Instead of the 7 million new accounts management expected to add, it ended up with 15.7 million.

To be sure, the coronavirus pandemic and stay-at-home orders fueled sign ups for Netflix. Management even warned investors not to get too excited. "Intuitively, the person who didn't join Netflix during the entire confinement is not likely to join soon after the confinement." And management said it expects subscriber additions to come in lighter in the second half of the year compared to last year.

While lockdown orders continued through the second quarter, with many governments cautiously allowing businesses to reopen in May and June, there's a bigger factor at play that could lead Netflix to outperform its expectations to add 7.5 million net subscribers: Fewer people are cancelling their subscriptions.

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Source Fool.com