This represented 22.8% year-on-year growth yet revenue came in below that forecast at $5.768 billion, a growth of compared with the same period of 2019. The Q1 operating income of $958 million was more than double that generated in the quarter a year ago while operating margin was 16.6%. Net income was $709 million, again more than twice the figure posted in the first quarter of 2019.

Netflix noted that excluding a $115 million impact from currency exchange differences, its streaming ARPU grew 8% year over year and that the reported operating margin was lower than the 18.0% forecast as it incurred $218 million in incremental content costs due to paused productions and hardship fund commitments.

Yet despite the massive growth, Netflix bluntly accepted the exceptional circumstances that it found itself in and the drivers for its upsurge. It noted that during the first two months of the quarter, membership growth was similar to the prior two years, including in the US, Canada, Australia and New Zealand (UCAN) countries. It added that with lockdown orders in many countries starting in March, many more households joined Netflix to enjoy entertainment. This had an adverse effect on ARPU and was cited as the primary driver of the sequential decline in streaming ARPU as the revenue impact from these additions late in the quarter will be mostly felt in Q2’20 and beyond.

Looking forward, Netflix revealed in its results statement that while its productions were largely paused around the world, it was benefitting from a large pipeline of content that was either complete and ready for launch or in post-production when filming stopped. It cautioned that when governments lifted home confinement orders it expected viewing and growth to decline and as such forecast 7.5 million global paid net additions in Q2 2020. It also suggested that some of the lockdown growth will turn out to be pull-forward from the multi-year organic growth trend, resulting in slower growth after the lockdown is lifted country-by-country. Netflix noted that anyone not subscribing to its service during lockdown was not likely to join after the confinement.

Significantly the company observed that this time last year it was due to welcome new series of the hugely popular Casa de Papel (Money Heist) and Stranger Things in Q3 2019; neither series is planned for Q3 2020. Therefore, it was offering the guidance that Q3’20 and Q4’20 would have lower net additions than last year due to these effects.

These issues notwithstanding, Netflix has seen its stock surged over the last twenty four hours. Indeed a number of the major steaming players – Roku and Disney included - have also risen on the rising tide of Netflix. Even companies owning yet to be fully launched services, namely HBO Max and Peacock, have benefitted.