Netflix Reports Record Subscriber Growth For Q2

Netflix Inc. (NASDAQ:NFLX) surpassed forecasts for subscriber growth in the second quarter of its fiscal year. The company signed up 5.2 million subscribers in the second quarter. That was 2 million more than analysts had forecast. The company reported that 4.14 million of those new viewers came from outside the U.S.

Netflix has started to become popular in some of the biggest countries in the world. Netflix began to move overseas in late 2010. It first expanded to Canada, which remains the service’s largest international market. The U.K., Brazil, and Germany are Netflix’s three largest markets outside the U.S. and Canada.

The company boosted its international audience past the domestic total for the first time. The international total is now more than 52 million. Netflix has promised international markets will be a source of new customers for years to come.

Netflix said international operations will be profitable for the first time this year. The company is estimated to be in at least 20 percent of broadband households in five of its largest markets outside the U.S. by the end of the year. Co-founder and Chief Executive Officer Reed Hastings wants 80 percent to 90 percent of the company’s audience to be outside the U.S.

Total sales for the quarter grew to $2.79 billion, compared with projections of $2.76 billion. However, net income of $66 million, or 15 cents a share, was lower than the 16-cent average of analysts’ forecasts. The results were surprising. The second quarter is typically its slowest season of the year. Shares of Netflix soared as much as 11 percent in extended trading after the earnings release. The stock is up 31 percent this year.

Netflix forecasts net income of 32 cents a share on revenue of $2.97 billion for the current third quarter. Analysts are forecasting net income of 23 cents and revenue of $2.88 billion. The company projects it will add 4.4 million new subscribers in the quarter. That is higher than the 3.96 million average of analysts’ estimates.

In the second quarter, Netflix released more than 50 new programs. Those programs included 14 original series, 13 stand-up comedy specials, nine original films, seven original series for kids, six documentaries and two documentary series. The shows have been received well. Netflix earned 91 Emmy nominations last week, the most in company history. The company also canceled a handful of shows in the quarter.

 

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