Netflix Adds A Whopping 5.2 Million Subscribers In Blockbuster Quarter
Netflix couldn’t keep new subscribers away in its latest quarter.
The streaming giant said on Monday that it added 5.2 million subscribers in the second quarter, crushing its own forecasts of 3.2 million new subscribers.
“In Q2, we underestimated the popularity of our strong slate of content which led to higher-than-expected acquisition across all major territories,” wrote CEO Reed Hastings in a letter to investors.
Netflix has been overoptimistic in previous quarters and delivered disappointing subscriber growth figures. On Monday, it noted that “we strive for accuracy” and are “cognizant of the lessons of prior quarters.”
The figures include 1.1 million new U.S. subscribers, which is more than it has added in any quarter in the last six years, and comes at a time when investors are concerned about the company’s domestic growth. Netflix also added 4.1 million international subscribers. Half of the company’s subscribers are now located abroad.
Netflix also reported mixed financial results in its latest quarter. Overall net income rose to $66 million, or 15 cents per share, from $41 million, or nine cents per share, a year earlier. Wall Street analysts had estimated 16 cents per share.
Revenue climbed 32% to $2.78 billion, beating analyst estimates of $2.76 billion.
The company has been plowing money into original content, producing hits like Stranger Things, The Crown and 13 Reasons Why. In the second quarter, it released 14 new seasons of its original series. It’s also started to invest in more stand-up comedy and movies that are exclusive to Netflix.
“We expect Netflix’s original content ramp to continue to drive accelerating international net additions, especially as Netflix increases investment in local content overseas and expands genres such as movies and non-fiction,” wrote UBS analyst Doug Doug Mitchelson in a note to clients.
Netflix has also faced increasing competition from Amazon and Hulu, which have bulked up their own original content offerings. Cable television providers like Dish have also rolled out smaller bundles for viewers who want a cheaper option.
However, Hastings has sought to reassure investors on this front, noting that “the largely exclusive nature of each service’s content means that we are not direct substitutes for each other, but rather complements.” Netflix has won high praise for many of its shows, just garnering 91 Emmy nominations, which is double its count from last year.
Netflix is forecasting that it will add 4.4 million new subscribers in the third quarter, composed of 750,000 U.S. subscribers and 3.65 million international subscribers.
The company’s global expansion has been a big part of its growth story in recent years and Netflix said on Monday it expects its international division to turn an annual profit for the first time ever this year.
Shares of Netflix, which have surged 63% in the last year, jumped 8% in after-hours trading.