Netflix shares soar on subs growth

Netlix exceeded analyst expectations yesterday after revealing it added 5.2 million new customers during the second quarter of the year, sending its shares up more than 10%.

The streaming giant, home to series such as Stranger Things and Narcos, said it expected further growth and predicted a full year profit from its global operations for the first time, as international subscriptions outweighed those of the US.

In the quarter to end of June, Netflix said it had lost US$13m on its international operations but expected that to swing to profit by the end of the next quarter.

The streamer also said international subs had risen above those from within the US for the first time, with its second quarter results unveiled yesterday confirming a further 4.14 million subs outside of the US – up on analyst predictions of around 2.6 million.

In the US, it secured another 1.07 million customers, up from expectations of around 600,000, handing it a global subs base of just under 104 million.

A further 3.65 million international subscribers and another 750,000 US customers are expected to be added between July and September, Netflix said.

The streamer has been ratcheting up its content spending over the past 18 months and now spends US$6bn annually on new shows, but has axed several recently.

New seasons of originals such as House of Cards and Orange is the New Black have premiered recently, partly helping subs, while international commissions are also enticing customers.

Its first original from Spain, Cable Girls (Chicas del Cable), had gained “significant” viewers across the Spanish-language world according to Netflix, which recently ordered its second homegrown Spanish title.

The results mark a boon for the company, which had faced a slowdown in its biggest market in the US. This time last year, it also saw shares plummet after unveiling disappointing subs numbers internationally, adding just 1.7 million new members.

Netflix revenue hit US$2.79bn for the quarter with a net profit of US$66m, equivalent to 15 cents per share.