Last quarter Netflix launched inÂ 130 new countries. Today we found out whetherÂ the company’s ambitious expansion plan is working.
So far, the answer is: yep, for now. Netflix has 81.5 million subscribersÂ after addingÂ moreÂ subscribers than ever in a single quarter.Â (Not drastically more, mind you, but a record’s a record.)
Last quarter, Netflix said it would addÂ 6.1 million (net) new subscribers inÂ Q1 2016 — it added 6.74 million. Of those new subscribers, the vast majority live outside the U.S. Meanwhile,Â Netflix’s domestic growth continues to crawl; the company added just 2.23Â million new subscribers in the U.S. this past quarter, which is above Netflix’s anticipated 1.75 million.
Here’s a closer look at the company’sÂ overall subscriber growth over the past few years.
And how Netflix’s international growth compares to its growth in the U.S.
The Verge notesÂ thatÂ Netflix is setting low expectations for growth next quarter: The company expects “to add 2.5 million members with 0.5 million in the US and 2.0 millionÂ internationally” — down from 2.4 million new international subscribers in Q2 2015. Investors expected more. It’s worth noting, however, that Q2 is usuallyÂ a low-growth quarter for Netflix.
During the company’s earnings call, CEO Reed Hastings noted that Netflix is only available in English and accepts onlyÂ international credit cards. The implication is that there’s a lot of untapped growth potential for Netflix.
Despite the growth, NetflixÂ missed revenueÂ expectations for the quarter, with $1.96 billion in revenue and $0.06 earnings per share. Analysts guessed the company would reportÂ $1.97 billion in revenue and earnings of $0.03 per share.
Netflix’s earnings releaseÂ follows two bigÂ announcements:
- Netflix is raising prices for many users to $10 a month.
- Amazon is spinningÂ out its Netflix competitor, Prime Video, as a standalone service. The price? A convenientÂ $9 a month. By the way, Netflix’s Hastings saidÂ this would happen four years ago,Â Recode points out.
Both of these narratives factor into how investors value Netflix today and in the near future. Already, following the Amazon news, Netflix stock sankÂ about 4Â percent today before recovering by about 2 percent before the bell. In after-hours trading, the company’s stock slippedÂ more than 11 percent.