Netflix profits soar as service tops 50 million subscribers
Netfli’s earnings soared in the second quarter as the online streaming service reached an important milestone by topping 50 million subscribers.
On Monday, Netflix said profits more than doubled in the quarter to $71 million, or $1.15 per share. That was just shy of the $1.16 per share predicted by analysts.
Netflix also said that revenue grew 25% to $1.34 billion, including $1.14 billion from its streaming service. Both numbers met Wall Street estimates.
Netflix (NFLX) led off its quarterly letter to shareholders by touting the fact that it passed the 50 million subscribers mark for the first time, including 36 million in the U.S. The subscriber totals were being closely watched by investors for any slow down in subscriptions after the company raised prices in May by $1 for new subscribers. But the company netted about 1.7 million additional members after predicting a bump of 1.5 million. It expects to add another 1.3 million subscribers next quarter in the U.S. alone.
The popularity of original Netflix series like House of Cards and Orange is the New Black, both of which had their season premieres in the second quarter, was expected to help boost subscriptions. Those two programs led the way for Netflix when it recently garnered 31 Emmy nominations, more than doubling last year’s total.
In April, Netflix noted that it is still well short of rival HBO’s 130 million members worldwide, but Netflix is also gradually expanding its presence overseas. Already available in the U.K. and several other countries, Netflix said that it is hopes to introduce its service to France and Germany as well as Austria, Belgium, Luxembourg and Switzerland in September.
Meanwhile, the company’s domestic DVD rental business continue to shrink, shedding 391,000 members last quarter as people either leave the service altogether or simply switch to the more popular streaming-only membership option. The DVD business still has 6.3 million U.S. subscribers.
The Netflix shareholder letter also included news that the company will start selling physical gift cards in stores across North America and Germany starting this fall.
Netflix shares closed Monday up 1.8% in regular trading plus another 1% in after-hours, or around $456.76.