Netflix shares climbed in after-hours trading following the release of its Q1 earnings after the US market closed, Monday. The online streaming business recorded healthy earnings and said it added more new customers than anticipated in the first three months of 2018.
Netflix shares ended the regular US trading session over 1% in the red, Monday. However, once the results were published, the stock surged and is some 6.24% higher at $327, in after-hours activity.
Netflix’ Q1 earnings results showed the tech firm achieved 43% revenue growth compared with Q1 2017, proving the business can still grow while it raises prices. Q1 revenues hit $3.7 billion, mildly higher than its own $3.69 billion forecast.
Indeed, those price hikes clearly failed to diminish the streaming service’s appeal as it added 7.41 million global subscribers between January and March. That’s higher than its guidance of 6.35 million new adds and some 50% up on the level of new subscribers a year earlier.
It also represents the largest number of new Netflix subscribers in a quarterly period on record. In addition, some three quarters of those new subscribers were from overseas.
“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,” Netflix said in its earnings release.
The business also achieved earnings per share of 64 cents, in line with expectations.
Upbeat outlook for Netflix
Looking ahead to the next quarter, Netflix was once again, positive.
The streaming service anticipates:
- Earnings per share of 79 cents.
- Total global new subscriber additions of 6.2 million.
- Q2 revenues of $3.9 billion.
“Whether or not our share of that [online viewing hours] grows or shrinks is really up to whether or not we produce great content, market that well, serve it up beautifully, and if we do that well, earn more of consumers' time then we continue to grow and if we get lazy or slow we'll get run over just like anybody else,” said Netflix CEO Reed Hastings in a pre-recorded interview.