Netflix, Inc. (NFLX) Reports Q1 Global Net Adds Totaled 7.41M

(Updated - April 16, 2018 4:40 PM EDT)

(Updated - April 16, 2018 4:18 PM EDT)

Netflix, Inc. (NASDAQ: NFLX) reported Q1 EPS of $0.64, in line the analyst estimate of $0.64. Revenue for the quarter came in at $3.7 billion versus the consensus estimate of $3.69 billion.

It sees Q2 EPS of $0.79 on revenue of $3.93 billion vs the consensus of $0.64 on revenue of $3.89 billion.

Revenue grew 43% year over year in Q1, the fastest pace in the history of our streaming business, due to a 25% increase in average paid streaming memberships and a 14% rise in ASP. Operating margin of 12% rose 232 bps year over year. This was higher than our beginning of quarter guidance, due primarily to the timing of content spend. Diluted EPS of $0.64 vs. $0.40 included a $41m non-cash unrealized loss from F/X remeasurement on our Eurobond.

Global net adds totaled a new Q1-record of 7.41m, up 50% year over year and ahead of our 6.35m forecast. The variance relative to our guidance was driven by continued strong acquisition trends across the globe which we attribute to the growing breadth of our content and the worldwide adoption of internet entertainment.

In the US, we added 1.96m memberships (compared with forecast of 1.45m). We completed our price adjustment during this past quarter, resulting in 12% ASP growth for the domestic segment. Outside of the US, membership grew by 5.46m (vs. forecast of 4.90m). Our international segment now accounts for 50% of revenue and 55% of memberships. Excluding a F/X impact of +$114 million, international revenue and ASP rose 59% and 13% year over year, respectively.

As a reminder, the quarterly guidance we provide is our internal forecast at the time we report. For Q2, we expect 6.2 million global net additions (1.2m in the US and 5.0m for the international segment) vs. 5.2 million in the year ago quarter. Q2 operating margin is expected to be 12%. We are now targeting a full year operating margin of 10%-11%. We continue to anticipate content and marketing spend to be weighted towards the second half of 2018

For earnings history and earnings-related data on Netflix, Inc. (NFLX) click here.

You May Also Be Interested In

• Bristol-Myers Squibb (BMY) stock slips despite earnings beat
• California Water Service (CWT) Tops Q1 EPS by 111c
• Tractor Supply (TSCO) Tops Q1 EPS by 12c ; Offers Guidance