Even a cost hike can’t slow Netflix down.
Netflix ( added 7.4 million subscribers from the first three months of 2018, up 50% by the same quarter a year earlier, the company reported on Monday. the item at This specific point has 125 million subscribers. )
The strong subscriber growth came in well ahead of Wall Street’s estimates, helping send Netflix stock up 6% in after-hours trading Monday.
Daniel Ives, an analyst with GBH Insights, called Netflix’s earnings results “eye popping” in an investor note.
“the item shows the company’s aggressive international expansion strategy is actually bearing fruit as well as also putting major fuel from the company’s growth engine for the rest of 2018 as well as also beyond,” Ives wrote.
Expectations were high heading into Netflix’s earnings report. While several leading tech companies have stumbled This specific year amid regulatory concerns, Netflix stock has soared 60% on optimism for its original content strategy.
On a conference call with analysts, Netflix executives admitted to being surprised by the company’s current level of success.
“We’ve outperformed the business in a way we didn’t predict,” David Wells, Netflix’s CFO, said on a conference call with analysts Monday. “The business has grown faster than we expected.”
Much of that will growth is actually at This specific point coming by overseas. The vast majority of the completely new subscribers last quarter, nearly 5.5 million, came by outside the United States as Netflix continues to gain ground in international markets.
During the first quarter of This specific year, Netflix launched 18 original series, 11 completely new seasons for existing original series, as well as also 14 completely new original movies, according to Michael Pachter, an analyst with Wedbush.
The lineup included a completely new season of “Jessica Jones,” a reboot of “Queer Eye” as well as also the launch of a completely new talk show by David Letterman, which kicked off with an interview with former President Barack Obama.
Related: Sorry, Hollywood. Netflix rules the media world
Netflix expects to have 700 programs available for customers in 2018. yet there’s at least one area the item’s not planning to expand into: news programs.
“We’re not looking to expand into news beyond the work that will we’re doing in shortform as well as also longform feature documentary,” Ted Sarandos, Netflix’s chief content officer, said on the call.
All that will original content doesn’t come cheap. The company expects to spend as much as $8 billion on shows as well as also movies This specific year, up by $6 billion in 2017, according to the earnings report.
Netflix has at This specific point committed $17.9 billion to streaming content deals, up by $15.3 billion a year earlier. the item also reportedly coughed up $300 million to hire Ryan Murphy, the power producer behind “Glee.”
To help cover its mounting costs, Netflix hiked prices by 10% from the final quarter of 2017, to $10.99 a month for the standard service. Yet, the company’s subscriber growth continues to be trending from the right direction.
Netflix expects to add 6.2 million subscribers from the upcoming quarter, which could also come in above Wall Street estimates.
Still, Netflix continues to face stiff competition. Apple is actually ramping up its investments in original content. Amazon is actually rumored to be willing to drop $1 billion on just one TV show. Even Facebook is actually pushing deeper into video content. (Netflix’s CEO Reed Hastings sits on its board).
The belief among analysts like Deutsche Bank’s Brian Kraft is actually that will Netflix has too much of a head start to lose at This specific point.
“Netflix has changed the industry in a profound way as well as also in doing so has given itself a significant lead, creating the item very difficult for the traditional media companies, or even different big tech companies, to catch up,” Kraft wrote last week.
— CNN’s Paul R. La Monica contributed to This specific report.
CNNMoney (completely new York) First published April 16, 2018: 1:18 PM ET