Netflix's explosive growth may be starting to plateau. The streaming-video company reported Monday that it added 5.2 million new members between April and June, a million fewer customers than it had previously forecast.
In a letter to shareholders, Netflix (NFLX) blamed the shortfall to faulty internal projections of its subscriber growth, explaining that such guidance is often volatile. The company called its performance in the second quarter "strong but not stellar."
Netflix shares, which as one of the best-performing stocks have soared 109 percent this year, fell nearly 14 percent to $344.60 in after-hours trading. That erased roughly $25 billion from the company's market valuation.
The video service posted revenue of $3.91 billion in the period, falling short of Wall Street expectations. Sixteen analysts surveyed by Zacks expected $3.94 billion. For the current quarter ending in October, Netflix said it expects revenue in the range of $3.99 billion. Analysts surveyed by Zacks had expected revenue of $4.14 billion.