Netflix crossed a fun milestone today, crossing the $100 billion mark for its market cap as it once again surprised industry observers with better-than-expected growth in its subscribers.
We’ll get to the financial numbers in a minute but, as usual, the big story here is that it continues to wow Wall Street with impressive growth in its subscriber numbers. The company said it added more than 8 million new subscribers total after already setting pretty robust targets for the fourth quarter this year, giving it a healthy push as it crossed the $100 billion mark after the report came out this afternoon.
Here’s the rundown:
Netflix’s biggest challenge has been to aggressively invest in good original content that’s going to bring in new subscribers. While its shows may clean up at various awards shows like the Emmys, it still has to show that it can convert those awards into raw subscribers. But thanks to what appears to be continuing success with its original content like Stranger Things, as well other returning seasons for shows like The Crown, it’s been able to continue its staggering run.
While the company’s core financials actually came in roughly in line with what Wall Street was looking for (which is still important), Netflix’s subscriber numbers are usually the best indicator for the core health of the company. That recurring revenue stream — and its growth — is critical as it continues to very aggressively spend on new content.
And that aggressive spend only seems to get more aggressive every time we hear from the company. Netflix is now saying that it expects to spend between $7.5 billion and $8 billion on content in 2018 — which is around in line with what it said in October when it said it would spend between $7 billion and $8 billion. It’s the same range, but tuning up that bottom end is still an important indicator.
Here’s the final slash line for the company’s report today:
- Revenue: $3.29 billion, compared to $3.28 billion estimates from Wall Street
- Earnings: 41 cents per share, in line with estimates from Wall Street
- Q4 US subscriber additions: 1.98 million
- Q4 International subscriber additions: 6.36 million
- Q1 forecast US additions: 1.45 million
- Q1 forecast international additions: 4.90 million
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