- Netflix (NASDAQ:NFLX) jumps in AH trading after posting Q1 subscriber numbers above estimates.
- The company reported 1.96M domestic streaming additions vs. 1.48M consensus and guidance for 1.45M guidance.
- International streaming additions rose to 5.46M during the quarter vs. 4.98M consensus and guidance for 4.90M
- Total streamings adds were 7.41M for the quarter vs. 6.32M consensus. Total memberships were 125M at the end of the quarter.
- Q1 U.S. streaming contribution margin increased to 38.3% from 34.4% last quarter. The international contribution margin rate was 15.3%.
- The company's operating margin jumped to 12.1% from 7.5% in Q4.
- Netflix on cash and debt: "We have about $2.6 billion in cash and we will continue to raise debt as needed to fund our increase in original content. Our debt levels are quite modest as a percentage of our enterprise value, and we believe the debt is lower cost of capital compared to equity."
- Netflix on content spending: "We’ll have $7.5-$8 billion of content expense (on a P&L basis) in 2018 across a wide variety of formats (series, films, unscripted, docs, comedy specials, non-English language) to serve the diverse tastes of our growing global membership base."
- Looking ahead, Netflix expects Q2 total streaming adds of 6.20M vs. 6.30M consensus.
- Source: Netflix Q1 shareholder letter
- Upcoming: Netflix earnings call webcast
- NFLX +6.34% AH to $327.30.
Original article