During July-September time period, Netflix attracted over 7 million new streaming subscribers which is three folds more than Wall Street had estimated. On Tuesday, now the world’s biggest online subscription video service released its quarterly earnings and revealed to have 137 million of total monthly membership worldwide which is about 2 million more than it expected.
As reported in Reuters, shares of Netflix which was already 78% this year, surged 14% to $394.25 in after-hours trading. The leap in subscribers marked as a strong comeback from three months ago, after it failed to meet Wall Street’s subscriber growth target in Q2 that tumbled its 14% stock. This year, the 21-year-old company plans to invest over $8 billion in original programming and forecasts to add 28.9 million customers in total.
According to Bloomberg news, the results would extend Netflix’s reign as one of the best-performing stocks in Wall Street. The release of Netflix’s highest slate of movies and original TV shows paid off in terms of new subscribers and lured them with new seasons of hits including ‘BoJack Horseman’ and ‘Orange is the New Black’. Reed Hastings, Netflix’s President, Chairman, and CEO said it is the company’s job to make Netflix stand out from the massive competitors including content companies, tech firms, and traditional media firms.
News reported that the company saw its strong growth widely across all market including Asia, citing a letter to shareholders. Netflix’s executives said shows such as ‘Sacred Games’ in India, tailored to specific markets, are identified as key to company’s expansion.
In the last quarter, the company signed up about 1.1 million subscribers in the United States which was above the estimated 674,000 while the international market shot past estimates of 4.5 million to 5.9 million subscribers. Netflix forecasts to add 7.6 million subscribers in international market and 1.8 million in the US for the current quarter.
As reported by Cowen and Co analysts, Netflix included nearly 676 hours of entertainment programing in the United States which 135% more than a year earlier. To fund such incessant growth of TV shows and movies, the company has been borrowing heavily. In less than three years, Netflix issued a net $7.5 billion of bonds which could make it vulnerable to higher capital cost with rising interest rates, the analysts added.