Netflix up on in-line earnings, expanded subscriber base

Netflix up on in-line earnings, expanded subscriber base

This included its global streaming subscriber base reaching 125 million members - net add of 7.41 million - which brought in $3.6 billion in revenue in the quarter. On Monday, the company said it aims to add another 6.2 million subscribers in the second quarter.

During the quarter ended in March, Netflix boosted original programming on its monthly subscription service by 85% from a year earlier to a record 483 hours, according to Cowen & Co analysts.

Netflix, Inc. shares were trading at $307.78 per share on Monday afternoon, down $3.87 (-1.24%).

For the second quarter, the company sees a small slowdown in the number of additions, expected at 6.2 million, including 1.2 million in the U.S. and 0.5 million worldwide.

"I think we are substantially inoculated from the other issues that are happening in the industry". The company expects to spend more than $10 billion on such content this year, compared with about $1.3 billion on technology, he said.

Netflix (NASDAQ:NFLX) last posted its earnings results on Wednesday, January 18th. As it has expanded to some 190 countries, investors accepted negative free cash flow in exchange for the potential of outsized growth in future years.

French rules to compete in the Cannes would have meant that Netflix's films couldn't be streamed for three years after their release, and the company "would never want to do that to our French members", according to a letter to shareholders Monday.

Netflix said its non-English programming also is gaining traction.

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Streaming revenue represented an overwhelming $3.6 billion of Netflix's total $3.7 billion in revenue. Notably, the revenue increase goes down as the fastest pace in the history of its streaming business, spurred by a 25% increase in average paid streaming memberships and a 14% rise in ASP.

In an earnings call, Netflix chief content officer Ted Sarandos said the company is not going to change its stance about giving some of its movies limited theatrical runs.

"Subscribers are accelerating even at higher pricing", BTIG analyst Richard Greenfield said.

Popular shows such as "Stranger Things", "House of Cards", and "Black Mirror" have enabled Netflix to keep attracting millions more subscribers each year while cultivating enough customer loyalty to be able to gradually raise its prices. The company has a market capitalization of $62.75 billion, a PE ratio of 339.02 and a beta of 1.27.

It's not common for growth to re-accelerate at an already large company, particularly one like Netflix, which has already signed up roughly half or more of United States households that have fast Internet service. Wells Fargo & Company MN raised its position in Netflix by 22.5% in the 4th quarter.

Sarandos cited the example of Millarworld, which Netflix purchased past year for an undisclosed sum.

This growing output justifies price increases, Netflix says.

"But if you do that, you can get people to pay a little bit more because then we are able to invest more and further improve", he said.

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