Netflix had good news for stockholders in its Q1 2015 earnings report, released on Thursday, with subscriber growth and overall income both beating projections.
The streaming service added a record 4.88 million new members in Q1, besting its forecast of 4.1 million, bringing its total global streaming membership to 62.3 million. It gained 2.3 million new members in the U.S. and 2.6 million internationally, versus forecasts of 1.8 and 2.25 million, respectively. The numbers also beat the 4 million subscribers added during the same period last year and the 4.33 million added in Q4 .
Netflix’s overall operating income for Q1 2015 was $97.456 million – on par with the $97.595 for the same period last year, and far exceeding the $79 million forecast.
“What we are seeing is the dollars invested in our original programming are more efficient, in that for every dollar spent we get more bang for the buck in terms of hours viewed,” said Ted Sarandos, Netflix’s chief content officer and VP of content, during the company’s Q1 2015 Results Earnings Conference Call on Wednesday (below). “And hours viewed leads to higher retention, more word-of-mouth and more brand halo.”
Investors responded positively to the news. Netflix shares rose 11% in after-hours trading following yesterday’s release of the earnings report, according to the Wall Street Journal, capping a three month period that had already seen a 47% increase in stock value.
Less positive was the net income, which was $23.7 million, down from $83.4 million in Q1 2014 – a decrease the company says was negatively affected by currency-related transaction losses caused by a strong U.S. dollar.
In the last year, Netflix has been aggressively expanding into foreign territories. The services is now available in more than 50 countries, including its most recent additions Australia and New Zealand, where it launched last month.
In its letter to shareholders, Netflix said that starting in Q2 it intends to shift some of its U.S. marketing budget to international territories to take advantage of growth opportunities.
Image courtesy of Netflix.