Netflix posted expectation-exceeding surge in the number of its subscribers and total revenue during the July-September quarter, rebounding strongly from poor showing in the previous quarter.
The subscription video service reported on Monday that it was able to add 3.2 million international users and 370,000 American users to its platform during the last quarter. Those figures represent significant improvement over what the company and analysts had predicted.
Netflix had forecast growth of around 2.3 million in its total subscribers, with 300,000 expected in the U.S. and a combined 2 million in other countries where its service is available. Although the company is known to often be moderate in its forecasts, not many analysts expected new additions to its user base to exceed 3 million in the past quarter.
The strong surge in subscriber count during the last quarter was driven by increased interest in the service’s new original series, including Stranger Things, Luke Cage and the second season of the Latin American drug drama Narcos. It also came despite an increase of $2 in ongoing monthly price for its long-term members.
Recent expansion into more countries across the world also contributed to boost the number of subscribers in the face of considerable service cancellations by service users in the U.S. Netflix has expanded into more than 130 countries, with this significantly boosting its growth potential.
The Los Gatos, California-based online streaming video service said in a letter to its shareholders that the impact the premieres of its original shows had in international markets was “greater than expected.”
The news sent Netflix shares soaring by 20 percent to $119.78 in after-hours trading on Monday. They had closed at $99.80 (1.65 percent down) during regular trading.
The latest results represent marked improvement over the showing in the April-June quarter. The streaming video giant’s shares went tumbling down by about 13 percent after the announcement that only around 1.7 million subscribers were added during the period – the lowest in two years. Chief Executive Reed Hastings apologized to investors for the stock’s volatility afterwards.
“We can all see it’s time for me to apologize for the volatility again,” Hastings jokingly said, after seeing his company’s shares surge Monday.
The reported surge in count last quarter brings Netflix’s total streaming subscribers to roughly 86.7 million around the globe.
The jump in user count and hike in price helped the American streaming video company to $2.3 billion in total revenue during the quarter, a significant improvement on the $1.7 billion reported a year ago. The figure exceeded both company and analyst forecasts of $2.16 billion and $2.28 billion respectively.
Netflix also exceeded expectations in terms of earnings. It posted $51.5 million or 12 cents a share in profit, up from 7 cents a share in the year before. The earnings were more than double the 5 cents per share predicted by analysts in a poll by S&P Global Intelligence.
The latest quarter results will no doubt raise investors’ optimism that the 5.2 million new subscribers Netflix expects during the final quarter of the year is achievable.