Netflix stock experienced a decline on Tuesday following the company's Q1 earnings report and the announcement of a delay in its extensive password-sharing crackdown. Initially, Netflix had planned to implement the crackdown by the end of Q1, but it has now been postponed to Q2.

The company stated in its earnings release that the delay would result in a shift of some anticipated membership growth and revenue benefit to Q3, but that this would lead to better outcomes for both the business and its members. Netflix has already seen its subscriber growth impacted in international markets where it has initiated similar efforts.

Here's how Netflix's reported results compared to analysts' predictions from Refinitiv:

• Earnings per share: $2.88 vs. $2.86 expected


• Revenue: $8.16 billion vs. $8.18 billion expected

Netflix also announced the closure of its original DVD-by-mail service, which has been steadily declining. CEO Ted Sarandos confirmed in a blog post that the company would finally shut down the DVD mailing operation.

A year ago, Netflix reported its first subscriber loss in ten years, causing a drop in its stock price and those of its media counterparts. This led Netflix and other streaming services to prioritize profits over subscriber counts.

The performance of Netflix's new ad-supported plan, launched last November at $6.99 per month, will be closely watched. This tier was introduced after Netflix lost subscribers due to increased competition in the streaming market. Sarandos has mentioned that the company might offer multiple ad-supported plans in the future.

Wall Street will also be keeping an eye on Netflix's efforts to curb password sharing. The company announced late last year that it would start implementing measures to encourage account borrowers to create their own accounts. Netflix estimates that over 100 million households, or 43% of its worldwide user base, share accounts, which has impacted its ability to invest in new content. Both the ad-supported plan and the password-sharing crackdown aim to increase profits.

In February, Netflix introduced password-sharing guidelines in four countries: New Zealand, Canada, Portugal, and Spain. Users in these nations were asked to designate a "primary location" for their accounts and were allowed to set up two "sub-accounts" for additional fees for users living outside their home base. Netflix has not yet released password-sharing guidelines for the U.S., but it is expected to do so later this year.