Netflix Adds 7.4M Subscribers in First Quarter, Beating Expectations
The streaming giant's growth in the quarter was due mostly to its expansion into foreign markets.
Netflix added 7.4 million new customers to its streaming service in the first quarter, besting the company's projection that it would add 6.35 million on a worldwide basis, the company said Monday.
Netflix's growth in the quarter was due mostly to its expansion into foreign markets, as it added 5.46 million international subscribers while analysts expected roughly 5.02 million.
Netflix posted $3.7 billion in revenue, just slightly ahead of the projections of analysts. Adjusted earnings per-share of 64 cents was about what Wall Street had projected.
Netflix shares slipped 1 percent during the regular session on Monday, but have risen about 35 percent in the past three months. After the closing bell, the shares were soaring higher by as much as 8 percent.
Netflix intends on spending $8 billion on content this year as it faces competition from Amazon.com, Hulu and a plethora of other streamers, not to mention it also competes with traditional cable and broadcast television nowadays.
In a letter to shareholders, CEO Reed Hastings boasted that 43 percent revenue growth year-over-year was "the fastest pace in the history of our streaming business."
Only about $100 million of Netflix's total revenue came from its legacy DVD-by-mail business.
"Our 125 million members provided us with $3.6 billion in streaming revenue in Q1. Our job is to spend this money wisely to increase our members' delight," Hastings wrote.
"Last year, we expanded our efforts in original programming to unscripted shows across several genres," the exec continued. "Our output in this area is now comparable to similarly-focused U.S. domestic cable networks. Shows like Queer Eye and Nailed It are great examples of our ambitions in this area: engaging, buzz-worthy shows that drive lots of enjoyment around the world."
Hastings also wrote that while content deals with Ryan Murphy, Shonda Rhimes, Shawn Levy and Jenji Kohan "are a substantial investment for us, they allow us to work directly with prolific and talented creators with a proven track record of success."
He also boasted of the addition of Susan Rice, the former national security advisor and former U.S. ambassador to the United Nations, to the Netflix board of directors, which was a controversial move in some circles.
"As a global company operating in over 190 countries, Susan's expertise in international affairs will be valuable," Hastings wrote.
During a question-and-answer forum after Netflix released its quarterly earnings Monday, Hastings said the service's "breadth of content is really remarkable."
In the same session, chief content officer Ted Sarandos said that Netflix will not get into streaming news, though it will expand its offerings of topical interview shows like My Next Guest Needs No Introduction With David Letterman. Sarandos, though, had no comment on whether former President Barack Obama might be hosting such a show in the future, beyond saying negotiations are still proceeding.
Sarandos said the latest season of 13 Seasons Why, a mystery about a high school student who takes her own life, was perhaps the most popular show in the world last year.
On the movie side, Netflix has released more than 30 films theatrically, and more are to come, Sarandos said.