Netflix nears 100m users but misses Q1 sign-up target

Image Credit Netflix

Image Credit Netflix

The video streaming firm reported revenue that was in line with consensus for the first quarter but missed estimates and even its guidance on subscribers. Revenue growth continued during the quarter, rising by 38.8% year-on-year to US$2.516 billion.

While its subscriber growth slowed in Q1 2017, Netflix ended the period with a total of 98.7 million streaming memberships, consisting of 50.8 million in the USA and 47.9 million internationally. In addition, the company added 1.42 million streaming subscribers domestically, and added 3.53 million in the rest of the world. For the entire second quarter, it expects to add 3.2 million subscribers overall, boosting its global total to almost 102 million.

In a letter to shareholders to accompany its first quarter 2017 results, Netflix dismissed quarterly variances in customer sign-ups as "mostly noise" in the long-term growth and uptake of internet TV.

Subscriber rolls, the most closely watched measure of Netflix's growth, rose by just under 5 million globally in the first quarter, behind analysts' projection of 5.18 million, according to FactSet StreetAccount.

Netflix's subscriber growth shows no sign of slowing, with nearly half its customers coming from outside the U.S.

Netflix shares took a small dip right after the release but reversed course to 1.5% gains and fresh all-time highs later in the after-hours trading session.

Until recently, Netflix had competition in the U.S. only from Hulu, owned by major media companies like Disney, Comcast and Time Warner.

"Investors ask us about Amazon's move into NFL football". The net profit is estimated at United States dollars 66 million, with the operating margin at 4.4 percent.

Netflix expects to add 2.6 million subscribers internationally next quarter - it launched in 130 additional countries past year - and 600,000 subscribers in the USA, both which exceed analyst estimates.

Netflix has grown slower than it expected in the first three months of the year, but insisted that the opportunity for growth was "gigantic".

Netflix's marketing budget has almost doubled over the past few years from $607,186 in 2014 to a forecast of more than $1 billion this year.

"We don't think it will have much of an impact on us as Netflix is largely complementary to pay TV packages", the report read. Operating margin should dial back to approximately 4.4% because of a heavier production schedule; the full-year margin target remains at 7%.