World’s leading Internet television network, Netflix surpassed $2 billion in revenues for the first time in the third quarter of its operating year. Operating income amounted to $106 million (compared with our $64 million estimate) while net income was $52 million (vs. forecast of $22 million).
Interestingly, forty percent of its global streaming revenue totalled $2.2 billion was generated abroad.
In the Q3 earning report, the company stated that its over-performance against forecast (86.7m total streaming members vs. forecast of 85.5m) was driven primarily by stronger than expected acquisition due to excitement around Netflix original content. Netflix is now in the fourth year of its original content strategy and seems to be pleased with its progress. In 2017, it intends to release over 1,000 hours of premium original programming, up from over 600 hours this year.
For Q4, Netflix forecasts 5.2 million global net adds, with 1.45 million net adds in the US and 3.75 million new members internationally. The video streaming company also said it was getting ready to spend $6 billion on content next year, up $1 billion from 2016.
In a surprise move, the company stated that it would not be operating its own service in China because of the challenging regulatory environment for foreign digital content services. It said it would rather license content to existing online service providers in China. However it claims that it still have a long term desire to serve the Chinese people directly, and hope to launch our service in China eventually.
Netflix is available in over 190 countries globally.
