New seasons of House of Cards and Orange is the new Black accompanied by its latest hit, 13 Reasons Why, drove Netflix’s subscriber base to 104m in its second quarter, with net additional subscribers of 5.2m exceeding analysts’ forecasts.
Shares in Netflix jumped by up to 9 per cent in after-hours trading to $176.19.
Netflix overall revenues grew 32 per cent to $2.79bn, just ahead of Wall Street’s $2.76bn estimate, with net income up 60 per cent to $66m. At 15 cents per share, earnings were 1 cent below consensus forecasts but in line with Netflix’s own guidance.
Subscriber growth was ahead of analysts’ expectations at home and abroad, as “over the top” TV viewing continues to catch on in Europe. Netflix recorded 1.07m net adds in the US and 4.14m internationally. That meant Netflix’s 52m international streaming subscribers overtook its 51.9m domestic members for the first time. In another first, Netflix also said that its international business would make a positive profit contribution this year.
“In [the second quarter], we underestimated the popularity of our strong slate of content which led to higher-than-expected acquisition across all major territories,” Netflix said in its shareholder letter. “We are making good progress with our international expansion as improving profitability in our earlier international markets helps fund significant investment in our newer territories.”
Netflix is forecasting continued momentum into the third quarter. It said that it expects 4.4m net additional subscribers, with revenues of $2.96bn, net income of $143m and earnings of 32 cents per share all ahead of Wall Street’s current consensus.