Netflix Adds A Whopping 5.2 Million Subscribers In Blockbuster Quarter
Netflix couldn’t keep new subscribers away in its latest quarter.
The streaming giant said on Monday that it added 5.2 million subscribers in
the second quarter, crushing its own forecasts of 3.2 million new subscribers.
“In Q2, we underestimated the popularity of our strong slate of content which
led to higher-than-expected acquisition across all major territories,” wrote CEO
Reed Hastings in a letter to investors.
Netflix has been overoptimistic in previous quarters and delivered
disappointing subscriber growth figures. On Monday, it noted that “we strive for
accuracy” and are ”cognizant of the lessons of prior quarters.”
The figures include 1.1 million new U.S. subscribers, which is more than it
has added in any quarter in the last six years, and comes at a time when
investors are concerned about the company’s domestic growth. Netflix also added
4.1 million international subscribers. Half of the company’s subscribers are now
located abroad.
Netflix also reported mixed financial results in its latest quarter. Overall
net income rose to $66 million, or 15 cents per share, from $41 million, or nine
cents per share, a year earlier. Wall Street analysts had estimated 16 cents per
share.
Revenue climbed 32% to $2.78 billion, beating analyst estimates of $2.76
billion.
The company has been plowing money into original content, producing hits like
Stranger Things, The Crown and 13 Reasons Why. In the second
quarter, it released 14 new seasons of its original series. It’s also started to
invest in more stand-up comedy and movies that are exclusive to Netflix.
“We expect Netflix’s original content ramp to continue to drive accelerating
international net additions, especially as Netflix increases investment in local
content overseas and expands genres such as movies and non-fiction,” wrote UBS
analyst Doug Doug Mitchelson in a note to clients.
Netflix has also faced increasing competition from Amazon and Hulu, which
have bulked up their own original content offerings. Cable television providers
like Dish have also rolled out smaller bundles for viewers who want a cheaper
option.
However, Hastings has sought to reassure investors on this front, noting that
“the largely exclusive nature of each service’s content means that we are not
direct substitutes for each other, but rather complements.”
Netflix has won high
praise for many of its shows, just garnering 91 Emmy nominations, which is
double its count from last year.
Netflix is forecasting that it will add 4.4 million new subscribers in the
third quarter, composed of 750,000 U.S. subscribers and 3.65 million
international subscribers.
The company’s global expansion has been a big part of its growth story in
recent years and Netflix said on Monday it expects its international division
to turn an annual profit for the first time ever this year.
Shares of Netflix, which have surged 63% in the last year, jumped 8% in
after-hours trading.
Source: Forbes
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