Netflix up to 125 million customers
Netflix posted its strongest start to a year since the Los Gatos company went public 16 years ago, thanks to strong growth in markets across Latin America and Europe.
The company added 7.41 million subscribers in the first quarter of the year, easily topping analysts’ projections of 6.35 million. Netflix now has 125 million paying customers, the most of any online TV network. It expects to top 131 million subscribers by summer.
The company, the best-performing stock in the S&P 500 this year, is proving one quarter at a time that investors’ confidence in its online TV service has been justified. Netflix is using its growing subscriber base and deep pockets to poach talent from the biggest program suppliers and build a Hollywood studio for the Internet age.
Shares of Netflix rose as much as 8.3 percent to $333.21 in extended trading after the results were announced. The stock is up 60 percent this year.
Netflix said first-quarter profit rose to 64 cents a share, up from 40
cents a year earlier and meeting analysts’ projections. Sales for the quarter grew 40 percent to $3.70 billion, compared with projections of $3.69 billion.
For the current quarter, Netflix is predicting earnings of 79 cents and revenue of $3.93 billion. That compares with analysts’ estimates of 65 cents in profit and sales of $3.89 billion.
Netflix has told investors it will save money by bringing development and production in-house and avoiding the markups imposed by rival studios. Still, the company plans to spend up to $8 billion this year as it expands production of films, series, documentaries, comedy specials and non-English programming.
Some shows produced for specific countries are finding wider audiences, chief content officer Ted Sarandos said during a prerecorded earnings interview posted on YouTube. One example, “3%,” a science fiction series shot in Portuguese for Brazil, “has really scored around the world for us,” Sarandos said.
In February, producer Ryan Murphy agreed to leave 21st Century Fox, where he made “American Horror Story,” for a deal at Netflix worth a reported $300 million. Earlier, the company signed “Scandal” producer Shonda Rhimes, who left her longtime home at ABC to make shows exclusively for Netflix.
Sarandos said he couldn’t comment on reports Netflix is discussing a series with Barack and Michelle Obama or other deals that are “in various stages of negotiations right now,” but he said reports that Netflix wanted to move into news programs were not true.
Netflix is up against an increasingly competitive online streaming market.
“The consumer has a lot of entertainment options,” CEO Reed Hastings said. “If we earn more of the consumer’s time, then we will continue to grow. And if we get lazy or slow, we’ll be run over just like anybody else.”
In the last quarter, the company released the documentary miniseries “Wild, Wild Country,” the second season of Marvel comic series “Jessica Jones” and the horror film “The Cloverfield Paradox,” two of about 700 titles the company planned this year.
“Overall, this was a ‘grand slam quarter’ for Netflix,” analyst Daniel Ives of GBH Insights said in a research report. San Francisco Chronicle staff writer Benny Evangelista contributed to this report.