On Thursday, Netflix reported mixed Q4 results, which seemingly prompted its stock prices to drop by 20% hitting the lowest levels since the summer of 2020. 

While the results in themselves weren’t below expectations, the effect it had on investors wasn’t the best. Let’s take a look into what happened.

Earnings per share (EPS) surpassed consensus estimates of $0.82, by rising 11.8% compared to the year-ago quarter, reaching $1.33.

Netflix's revenue matched analyst forecasts of $7.7 billion. This represented the slowest pace of revenue growth out of any quarter in the past four years.

Perhaps the most disappointing part for traders was that Netflix's global paid streaming memberships missed -already reduced- analysts' expectations of 222.1 million. 
Netflix’s co-chief executive Reed Hastings said that he was frustrated by the slower growth in subscriptions. “We are staying calm and trying to figure it out.”

Since the number of global paid streaming memberships is how the company generates most of its revenue, this might be the number one reason behind Netflix’ stock drop.

The company’s stock price at $406.95 came after Netflix reported that it gained a net 8.28 million global streaming subscribers in its fourth quarter. For the sake of comparison, the streaming giant gained 8.5 million subscribers in Q4 2020.