Netflix’s 137M subscribers evaporate fears of a free fall

Netflix released sci-fi mindbender Maniac in the latest three-month period. 


Netflix crested over 137.1 million worldwide subscribers in the three months since July, squashing fears that world’s biggest paid online TV service might be on the brink of a downslide. US subscribers were nearly double what Netflix had predicted, while its members abroad also surged more than expected.

And it predicted its subscriber additions next quarter would be its best ever. 

The news reassures those worried that a blip in Netflix‘ subscriber numbers last quarter were an early signal of bad news to come, even as Netflix breaks through other milestones of traditional TV. Netflix, for example, snapped HBO’s 17-year streak of dominating the Emmy awards in the latest period, as both Netflix and HBO tied at 23 wins. But that means less to Netflix investors and analysts than subscriber growth, the one metric they track obsessively.  

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In its third-quarter results Tuesday, Netflix’s international subscriber base increased by 5.87 million members to 78.64 million, topping the 4.35 million additions it had predicted in July. In the US, Netflix added 1.09 million streaming customers, for a total of 58.46 million, besting its 650,000 guidance.

Investors rejoiced at the news, pushing shares up 13 percent in after-hour trading at $392.40 each.

Looking ahead, Netflix expects to add 1.8 million streaming members in the US and 7.6 million internationally in the current quarter. That would beat its best-ever quarter for subscriber additions by more than a million people. 

In the current quarter, Netflix predicted 23 cents per share in earnings. On average, Wall Street analysts who track Netflix expected 51 cents.

“We’ve come a long way in the five years since launching original content on Netflix,” the company said in a letter to shareholders Tuesday. It emphasized that even its hit shows, “which are viewed by tens of millions of our members,” still account for just a small, single-digit percentage of the total hours the users stream. 

Overall, Netflix reported a profit of $402.8 million, or 89 cents a share, compared with $130 million, or 29 cents a share, a year earlier. Revenue jumped 34 percent to $4 billion.

Analysts on average expected per-share profit of 68 cents — matching Netflix’s guidance — and $4 billion in revenue.

Original story published at 1:08 p.m. PT.
Updated at 1:19 p.m. PT, 1:29 p.m. PT and 1:32 p.m. PT: With more details about results. 

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