Netflix again exceeded subscriber growth expectations, grabbing 7.4 million streaming customers in the first quarter of 2018.
For the quarter ended March 31, the streaming giant had 1.96 million net streaming subscribers and 5.46 million international subscribers. The company's net profit of 7.4 million subs in the first quarter, a new record for the first quarter, surpassed the previous guidance of 6.35 million. The company had 125 million subscribers worldwide by the end of March.
Netflix generated $ 3.7 billion in revenue and $ 290 million in net income (67 cents per share) for the first quarter.
Netflix shares gained more than 6% in after-hours trading Tuesday. The stock lost 1
Wall Street analysts had expected that Netflix would report US net inflows of 1.48 million subs and 4.84 million international subs (in accordance with the company's previous projections))
Analysts' expectations fell short of the cap, Netflix noted in its letter to investors that quarterly revenue in the first quarter increased 43% over the previous year, "the fastest pace in the history of our streaming business." This was due to a 25% increase in average paid streaming memberships plus an 14% increase in the average subscription price, after Netflix raised its plans in the US and Canada for other Q4 2017 territories.
For the second quarter, Netflix expects 6.2 million global net additions (1.2 million in the US and 5.0 million in the international segment) versus 5.2 million in the prior year quarter and higher than the Wall Street analysts for Second Quarter Expected
The Company expects to spend $ 7.5 to $ 8 billion in content for 2018, which is currently estimated. Netflix also said it will "continue to take out debt to fund our increase in original content." Cash Consumption Continues: The Company Continues to Predict Negative Free Cash Flows of $ 3 to $ 4 Billion by 2018 and "Being Free Cash flow is still negative for a few more years as our initial spending rises rapidly."
The The first Netflix series to debut in the first quarter included "The End of the F *** ing World", the science fiction thriller "Altered Carbon" and recurring seasons of "Marvel's Jessica Jones", "Grace and
Frankie "," Santa Clarita Diet "and" A Series of Unfortunate Events ".
Netflix's marketing spend increased by a whopping 77% to $ 479 million in the first quarter. The company had previously told investors that it would increase its investment in marketing for 2018.
In his letter to shareholders, Netflix also called for the recent addition of Susan Rice, a former top adviser to President Obama, to its board. Rice is the controversial former national security adviser and US ambassador to the United States who served during the Obama administration. "As a global company operating in over 190 countries, Susan's expertise in international affairs will be valuable," said Netflix.
Shown above: "Marvel's Jessica Jones" Season 2 on Netflix, which premiered on March 8