Netflix miraculously blew past subscriber growth targets, and hits an all-time high.
In the last published report, total membership stood at 103.95 million. The US market accounted for 51.92 million subscribers while curiously the international market (outside US) accounted for more subscribers, with 52.03 million.
Netflix crushed its Q3 subscriber growth targets, blowing past them on both the domestic and international fronts by adding 5.3 million total.
The streaming giant beat slightly on revenue as well, though it turned in lower EPS than Wall Street was expecting.
The stock was up around 3% in the immediate aftermath of the news. (It had closed at a record high of $202.68 going into earnings.)
This beat on subscriber targets is an encouraging sign for investors, since Netflix recently started its first price hike since 2014, which some worried might weigh down growth. However, lower-than-expected US subscriber growth guidance for Q4 might signal that the price bump could still have some negative effect.
This is especially important because Netflix may have to continue to raise prices in the future to fund its massive investment in programming – which will be $7 to $8 billion in 2018, with $17 billion in future commitments, according to Netflix’s letter to shareholders.
Here were the key numbers from Netflix’s Q3 earnings:
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- $0.29, versus Wall Street estimates of $0.32 (in line with company guidance).
Q3 revenue:
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- $2.99 billion, up 30% year-over-year, versus Wall Street estimates of $2.97 billion.
Q3 US subscriber growth (net additions):
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- 850,000, versus Wall Street estimates of 774,000, and company guidance of 750,000.
Q3 international subscriber growth (net additions):
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- 4.45 million, versus Wall Street estimates of 3.72 million, and company guidance of 3.65 million.
Q4 US subscriber growth forecasts (net additions):
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- 1.25 million, versus Wall Street expectations of 1.63 million.
Q4 international subscriber growth forecasts (net additions):
- 5.05 million, versus Wall Street expectations of 4.66 million.
