In the first quarter of 2016, Netflix saw major gains in new subscribers, even as it cracked down on password sharing and other unauthorized uses of accounts. The company revealed today that it had added more than 2.4 million new subscribers worldwide in Q1 2016, bringing its total global subscriber base to 93.8 million. Netflix had previously projected that it would add 2 million subscribers during the first three months of the year, so this means it went well above and beyond its own expectations to add more than twice that amount.
The firm reported better-than-expected results on the top and bottom lines, which caused Netflix shares to soar more than 14% after the bell on Tuesday. Additionally, the streamer announced a 2.41 million net worldwide subscriber increase, more than double the additions the firm had anticipated a quarter earlier.
Netflix will also start cracking down on password sharing next year, preferring to let users who have been using borrowed accounts establish their own. The business will also let users who share accounts set up sub-accounts so that they may pay for friends or family members to utilise theirs.
These are the outcomes:
.According to Refinitiv, EPS was $3.10 instead of $2.13 per share.
.According to a poll by Refinitiv, revenue was $7.93 billion as opposed to $7.837 billion.
.StreetAccount believes that 2.41 million additional worldwide paid net customers are anticipated as opposed to 1.09 million additional subscribers.
Asia-Pacific accounted for 1.43 million additional Netflix customers during the quarter, which made up the majority of the company’s net subscriber increase. With just 100,000 net customers added, the Netflix area for the US and Canada saw the slowest growth.
During the company’s earnings call, Netflix’s chief financial officer, Spencer Neumann, stated, “We’re still not expanding as quickly as we’d want. We have momentum and are happy with our development, but we are aware that there is still a lot of work to be done.
Starting the next quarter, Netflix will stop providing guidance for its premium subscriptions but will still reveal those figures when it releases its quarterly profits.
Due in large part to currency headwinds abroad, Netflix predicted it will add 4.5 million customers during the first quarter of its fiscal year and stated it anticipates revenue of $7.8 billion.
The fourth season of “Stranger Things,” “The Gray Man,” and “Purple Hearts,” among others, were hailed by the firm as successes that aided in the third quarter’s growth.
It also hinted at the inclusion of its brand-new, less expensive ad-supported plan, which debuts in 12 nations in November.
The streamer expressed its “great optimism” on its new advertising venture. It does not anticipate that the new tier will materially impact its fourth-quarter performance, but it does anticipate that membership will progressively increase over time. Based on its forthcoming content schedule and the regular seasonality that occurs over the final three months of the year, it currently expects subscriber growth.
The business stated in a statement on Tuesday that it “believes we’re on a path to reaccelerate growth” after a difficult first half. The secret is winning over members. That is why we have consistently concentrated on outperforming the opposition for daily watching. When our members enjoy our television shows and films, they recommend them to their friends, who then watch, subscribe, and remain with us.