New York(CNN Business) Netflix's stock fell as much as 20% in after hours trading due to a bad outlook for its future growth.
Netflix (NFLX) now has 221.8 million subscribers globally. It added 8.2 million subscribers in the fourth quarter of 2021, the company reported on Thursday.
That number slightly missed the streaming service's own expectations, which had the streamer adding 8.5 million subscribers.
However, the big news was that the company also forecast that it would have 224.3 million subscribers for the first quarter of 2022. That's a growth of only 2.5 million, which is less than what analysts were expecting.
Netflix's fourth quarter profit was $607 million, up from $542 million in the year-earlier quarter. Revenue jumped 16%, to $7.7 billion.
The company said in its letter to investors that competition from streaming rivals "may be affecting our marginal growth some." However, it added, "we continue to grow in every country and region in which these new streaming alternatives have launched."
"This reinforces our view that the greatest opportunity in entertainment is the transition from linear to streaming," the company said.
Netflix pointed out that while "retention and engagement remain healthy," its growth has not "yet re-accelerated to pre-Covid levels."
The company attributed this to "several factors, including the ongoing Covid overhang and macro-economic hardship in several parts of the world."
Reed Hastings, Netflix's CEO, explained on the post-earnings call that there were myriad reasons for the company's low guidance. He mentioned increased competition as a cause, but noted that rivals like Amazon and Hulu have been around for many years.
And he conveyed confidence in the future of streaming, as well as Netflix's large market size and steady execution. "For now, we're staying calm," Hastings said.
The streaming giant's waning growth is a big reason why the company announced on Friday that it would raise prices in the United States and Canada, two of its biggest markets. The US subscription price of Netflix's standard plan rose $1.50 to $15.49. The basic plan went up $1 to $9.99 and the premium plan increased $2 to $19.99
Given competition from the likes of Disney+ and HBO Max, which is a unit of CNN parent company's WarnerMedia, Netflix is trying to offset its slower growth with higher subscription prices.
One bright spot for the streamer was in the US and Canada, where subscriptions increased by 1.2 million in the fourth quarter -- a sizable jump from the roughly 70,000 subscribers in added in the prior quarter.
Netflix's massive slide Thursday also hit other streaming companies. In after-hours trading, Disney shares fell roughly 4.5% and Roku was down about 6%.