Netflix Tops 130M Global Subs as Earnings Grow

Netflix reported higher earnings and the growth of both domestic and international subscriber totals exceeded expectations in the third quarter.

The company said global paid subscribers topped 130 million.

Paid domestic subscribers rose to 59.9 million in the third quarter from 51.35 million a year ago and 55.96 million in the previous quarter. The company projects that domestic subscribers will reach 58.46 million in the fourth quarter.

International subscribers rose to 73.46 million from 52.68 million a year ago and 68.39 million a year ago. Netflix projects that international paid subscribers will grow to 79.56 million in the fourth quarter.

Wall Street had been expecting about 600,000 added domestic subscribers and 4.2 million international subscribers.

Net income rose to $403 million, or 89 cents a share, $130 million, or 29 cents, a year ago.

Revenue rose 34% to $3.999 billion from $2.985 billion a year ago.

In its letter to subscribers, Netflix said that its operating margin expanded to 12%, more than the 10.5% it had forecast, because of the timing of content and marketing spending, some of which will move into the fourth quarter. That will mean a lower margin than forecast for the fourth quarter.

Netflix also said it plans to focus more on paid subscriptions and will only make forecasts for paid subscriptions. On a quarterly basis it will release graphs showing weekly paid net added subscribers. “We expect this additional disclosure will be helpful to your understanding of our business, in particular, how steady our paid membership growth is in the near term,” the company said.

Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.