Fueled by the growth of its international offerings, Netflix added 8.33 million streaming subs in Q4 2017, expanding its global streaming subscriber base to 117.58 million.
Netflix added 1.98 million streaming subs in the U.S. in Q4, versus 1.93 million in the year-ago quarter, broadening that total to 54.75 million.
Netflix racked up 6.36 million international subscribers in Q4, seeing that part of its base surge to 67.73 million.
Those numbers were better than expected, as Netflix had forecasted that it would add 1.25 million U.S. streaming subs, and 5.05 million streaming subs in Q4. As a result, Netflix shares were up 8.77% ($19.95) to $247.53 each in after hours trading Monday.
“We had a beautiful Q4, completing a great year as internet TV expands globally,” Netflix noted in its Q4 2017 letter to shareholders. (opens in new tab)
Looking ahead, Netflix expects to add 6.35 million streaming subs in Q1 2018 (1.45 million in the U.S., and 4.90 million internationally) and push its global total to 123.93 million.
On the financial front, Netflix posted Q4 revenues of $3.28 billion, up from $2.47 billion, and net income of $186 million (41 cents per diluted share). Netflix is forecasting Q1 2018 revenues of $3.68 billion, and net income of $282 million (63 cents).
For 2017, Netflix said average streaming hours per membership/subscriber grew 9% year-on-year, noting that it now plans to spend between $7.5 billion to $8 billion on content on a P&L basis in 2018.
“We’re taking marketing spend up a little faster than revenue for this year (from about $1.3B to approximately $2B) because our testing results indicate this is wise,” the company noted.
Netflix also talked up its growing partnerships with MVPDs and ISPs, including recent integrations with Cox Communications and Verizon Communications in the U.S., and an expanded agreement with Deutsche Telekom.
“These partnerships make it easier for consumers to sign up, enjoy and pay for Netflix, while our service allows our partners to deepen their relationship with these subscribers," Netflix said.
Regarding competition, Netflix acknowledged that Apple is beefing up its video programming, “which we presume will either be bundled with Apple Music or with iOS,” and noted that Disney is making plans to launch a direct-to-consumer service in 2019.
“The market for entertainment time is vast and can support many successful services,” Netflix said. “In addition, entertainment services are often complementary given their unique content offerings. We believe this is largely why both we and Hulu have been able to succeed and grow.”
Netflix also announced that it has added Rodolphe Belmer to its board of directors. Belmer, the former CEO of Canal+ Group in France, is currently CEO of Eutelsat, a global satellite company.
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