Last December, ‘Rogue One: A Star Wars Story’ took fans by storm.
Now you can stream it thanks to Netflix’s latest update.
Netflix is on a roll.
The dominant streaming video provider surpassed its own expectations — and Wall Street’s, too — with record growth during the April-June period, adding 5.2 million new subscribers, more than 1 million of them in the U.S.
Netflix had forecast additions of 3.2 million subscribers — 2.6 million internationally and 600,000 in the U.S. — for the second quarter, which has historically been the Net TV company’s slowest. Last year, Netflix added 1.68 million during the second quarter, compared to 6.74 million and 3.57 million in the first and third quarters, respectively.
And Netflix also offered a stronger-than-expected forecast for the third quarter, of 4.4 million new subscribers (3.65 million coming from international markets). Analysts had expected a forecast of about 3.1 million. Netflix added 3.6 million in the third quarter of 2016.
That performance boosted Netflix (NFLX) shares more than 8% in after-hours trading to $178 a share, hitting a new intra-day high price. The stock has risen more than 9% over the last three months and 64% over the last 12 months.
A strong wave of new content on Netflix helped drive new subscribers. During the quarter, Netflix introduced the fifth seasons of Orange Is the New Black and House of Cards, as well as the controversial teen-suicide drama 13 Reasons Why. “We underestimated the popularity of our strong slate of content which led to higher-than-expected acquisition across all major territories,” Netflix CEO Reed Hastings said in a letter to shareholders Monday.
Its growing library of TV series helped the provider rake in a slew of Emmy nominations (92) last week. Only HBO with 110 had more. Comedies Master of None and Unbreakable Kimmy Schmidt earned best comedy nods, while The Crown,
House of Cards and Stranger Things all gained top drama nominations.
Netflix reported revenue of $2.79 billion, up 32% from the same period last year, and better than the $2.76 billion the company’s forecast and the estimate of analysts polled by S&P Global Market Intelligence.
Earnings per share were 15 cents, compared to 9 cents a year ago. Analysts had expected 16 cents.
Net income of $65.6 million fell short of the $68.5 million analysts had estimated.
Netflix surpassed 100 million subscribers in April and is expected to have more than 108.3 million by the end of the current quarter, Sept. 30.
Last year during the second quarter of 2016 (April-June), Netflix saw some defections as the monthly price for service increased for many subscribers. That factor and “a very strong 2Q17 original content slate” led UBS analyst Doug Mitchelson to expect subscriber growth to surpass Netflix’s forecast in a note sent to investors last week.
“Overall, we remain bullish given broadening growth execution globally, the likely benefit of the continued original content ramp and favorable scale and competitive dynamics,” said Mitchelson, who has a price target of $175 on Netflix shares.
International subscribers grew enough to make up 50.1% of all subscribers, meaning Netflix now draws more than half of its audience from beyond the U.S.
Even though other streaming services such as Hulu have joined Amazon and Netflix in making original content, the prospect of competition does not dissuade Hastings and Netflix. “Internet TV is really catching on for us, for Youtube, and for others,” Hastings said in a video interview posted Monday.
He was also asked about the potential for the FCC to overturn 2015 net neutrality rules, which aimed to prevent companies that bring Internet into homes from favoring their own content over others. Two months ago, Hastings said the company had gotten big enough that it had no concerns about its content being throttled. However, he noted that the company participated in last week’s Net Neutrality Day of Action to drive awareness. “Certainly, we, other companies (and) the public have weighed in heavily,” Hastings said. “We will see where that goes.”
Netflix has cancelled some series in recent weeks including The Get Down and Sense8, as well as winding up Bloodline after three seasons. That doesn’t bother the company. In fact, Hasting talked about in May with CNBC about wanting to see even more cancellations.
“In this universe, we look at a lot of things, like failure is not such a bad thing and if you are not failing, maybe you are not trying enough,” said Ted Sarandos, the service’s chief content officer. About 93% of Netflix shows have been renewed, he said. “You want to be introspective and look at that and say, ‘Are we being adventurous enough?’ When you have a very high hit ratio you definitely want to keep second-guessing yourself, even though you do.”
Follow USA TODAY reporter Mike Snider on Twitter: @MikeSnider.
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