Netflix reported lower fourth quarter earnings as its subscriber base continued to increase both domestically and internationally.
Though down from a year ago, the earnings far outpaced expectations. The higher than expected earnings boosted Netflix stock, which jumped almost 8% in after-hours trading to almost $108 a share.
Revenues and subscribers were a bit below Wall Street forecasts.
“On January 1st, just a few hours after the quarter closed, we crossed 75 million members. Our quarter‐end 74.76 million members put us at over 17 million net additions for the year, showing how much the world is embracing Internet TV,” said CEO Reed Hastings and CFO David Wells in a letter to shareholders. “We think we’ll grow by over 6 million members in Q1 given our expansion of Netflix to virtually everywhere but China. We bring great stories from all over the world to people all over the world. “
Net income was $43 million, or 10 cents a share, compared to $83 million, or 19 cents a share a year ago. Wall Street analysts had been expecting earnings of 2 cents a share.
Revenue rose to 1.672 million in the quarter from $1.305 million a year ago.
U.S. memberships rose to 44.74 million from 39.11 million a year ago, and 43.18 million in the third quarter.
Worldwide memberships rose to 74.76 million from 57.38 million a year ago and 69.17 million in the third quarter.
"In the fourth quarter, we added a record 5.59 million members as our big shows such as Narcos and Marvel’s Jessica Jones helped us grow membership to 74.76 million. This 5.59 million compares to a forecast of 5.15 million and to prior year net additions of 4.33 million. For Q1, we are forecasting 6.10 million net additions vs. prior year of 4.88 million,” the Netflix execs said in the investor letter. “On earnings, we stayed profitable in Q4 despite foreign exchange headwinds, and delivered operating income of $60m and net income of $43m. We expect similar modest operating income results for Q1, assuming current foreign exchange, as we invest in our international expansion. As a reminder, the guidance we provide is our actual internal forecast at the time we report, and we strive for accuracy in our guidance.”