Netflix surges on massive subscriber growth

Carla Harmon
October 18, 2018

"We don't believe in 'open-ended growth stories.' But, darn, (Netflix) is about as close to one as you can find in today's market", RBC analyst Mark Mahaney said in a note. And to think, it all almost fell apart with Quickster. Netflix added 5.15 million subscribers in the second quarter of 2018, missing management's original forecast for 6.2 million. Analysts predicted growth of 5.07 million users but Netflix managed to attract 6.96 million net additions.

The company exceeded forecasts in both USA and worldwide markets but the bulk of the new subscribers came from outside the United States, where the company has been investing aggressively.

Revenue: $4 billion. Analysts were expecting $4 billion, according to Bloomberg.

Netflix is among the first of the major U.S. tech firms to report earnings.

Despite the subscriber gain, Netflix continues to burn cash, as the loss reached nearly $860 million in the quarter.

Those stellar numbers sent shares of Netflix up more than 11 percent in after-market trading, to $386.11. Subscriber growth was stronger than expected in the USA and overseas. So we're open to those possibilities, but there's so much growth ahead that's possible in streaming video, entertainment.

The company has released two India original series, Sacred Games and Ghoul, and has commissioned around nine more original series, making it the largest investment it has made to date in local original programming.

Netflix's stock rose 7% to $371.08 on Wednesday.

Interested in Netflix? Add Netflix as an interest to stay up to date on the latest Netflix news, video, and analysis from ABC News. Many, even with buy ratings on the stock and an upbeat general view, are concerned about the pattern of companies (notably Disney and WarnerMedia) promising to mount direct-to-consumer offerings rather than hock their wares to Netflix.

"Our broad slate of original programming helped drive a solid quarter of growth with streaming revenue increasing 36% year over year and global membership surpassing 130 million paid and 137 million total".

Currently, Netflix is the most expensive streaming service in India, starting at Rs. 500 per month for a single screen and Rs. 650 per month for HD quality.

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