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Netflix again saw a boom from COVID-19 lockdowns, packing on 10.1 million net new streaming subscribers in the second quarter — easily setting a new Q2 record for the company. But a lighter-than-expected Q3 subscriber forecast and an earnings miss sent the stock down in after-hours trading.

The results topped Netflix’s prior forecast of 7.5 million paid-subscriber adds for the period, though several analysts had predicted an even bigger haul. The streamer ended Q2 2020 with 193 million paid members worldwide.

“We live in uncertain times with restrictions on what we can do socially and many people are turning to entertainment for relaxation, connection, comfort and stimulation,” the company said in its quarterly shareholder letter.

In announcing Q2 results, the company also said longtime content chief Ted Sarandos has been promoted to co-CEO alongside Reed Hastings, who said the change was part of Netflix’s long-term succession planning.

Netflix’s historically volatile stock dropped more than 11% in after-hours trading Thursday. Investors may have been expecting an even bigger burst of subscribers for Q2, while the company forecast adding just 2.5 million customers in the third quarter — well below Wall Street expectations of at least 5 million (and compared with 6.8 million net adds in Q3 2019). Note that Netflix shares last week closed at an all-time high after some very bullish analyst crystal-balling heading into the earnings report.

Netflix also missed expectations for net income. The company posted revenue of $6.15 billion (up 25% year over year) and net income of $1.59 per share. Wall Street analysts on average had pegged the company’s Q2 revenue coming in at $6.08 billion and earnings per share of $1.81. Netflix’s Q2 earnings included two non-cash charges: a $119 million unrealized loss from foreign-exchange remeasurement on its Euro-denominated debt and a $220 million “valuation allowance” for deferred tax assets (due to recent legislation limiting the use of California R&D credits).

In the second half of 2020 — after adding 26 million paid net adds in the first half of the year — “we expect less growth for the second half of 2020 compared to the prior year,” the company said. “As we navigate these turbulent circumstances, we’re focused on our members by continuing to improve the quality of our service and bringing new films and shows to people’s screens.”

Netflix’s cash spending on content was $2.6 billion in the quarter compared with $3.3 million in the year-earlier period, lower because of the pandemic-induced halt in productions. The company is anticipating spending at least $1 billion less on content in 2020 (saying it now expects free cash flow for the full year to be break-even to positive, compared with its prior expectation for -$1 billion or better). Analysts at BMO Capital now expect Netflix’s cash content spending in 2020 to be $14.1 billion, about $1.5 billion lower than previously forecast.

The COVID-19 pause in production “pushed out cash spending on content into the second half of 2020 and into 2021,” Netflix said in the shareholder letter. As such, it’s expecting free cash flow in 2021 to again drop into negative territory but the company added, “we believe the FCF deficit will be materially better than our peak deficit level of -$3.3 billion in 2019.”

Marketing spending of $434 million in Q2 was down 28% year-over-year, as Netflix postponed some previous planned spending because of the coronavirus crisis. The company — which just announced the hiring of marketing veteran Bozoma Saint John as its new CMO — expects full-year marketing spend to be lower than in 2019 (when it reported $2.65 billion in marketing costs), CFO Spence Neumann said on the earnings interview.

Part of the reason for lower marketing spending is Netflix’s “march toward less traditional media,” Sarandos said during the Q&A. “It’s just a more efficient, more impactful and more global way to talk to our members, the new co-CEO said, adding, “it turns out the best place to talk to [customers] about Netflix is on Netflix.”

In discussing competition, Netflix cited the usual streaming suspects (Disney, NBCUniversal, WarnerMedia, Apple, and Amazon) — and also said, “TikTok’s growth is astounding, showing the fluidity of internet entertainment.”

Regionally, Netflix added 2.94 million subscribers in the U.S. and Canada, 2.75 million in Europe, the Middle East and Africa (EMEA), 1.75 million in Latin America and 2.66 million in Asia Pacific.