- Netflix (NASDAQ:NFLX) soars in AH trading after a big profit beat and strong subscriber growth guidance.
- The company reports 1.09M domestic streaming additions vs. 674K consensus and guidance for 650KM.
- International streaming additions were up 5.87M during the quarter vs. 4.46M consensus and guidance for 4.35M
- Total streamings adds were 6.96M for the quarter. Total memberships were 130.14M at the end of the quarter.
- Q1 U.S. streaming contribution margin increased to 39.3% from 39.1% last quarter. The international contribution margin rate came in at 17.1%.
- The company's operating margin improved to 12.0% from 11.8% in Q2.
- Netflix on free cash flow: "We anticipate that FCF will be closer to -$3 billion than to -$4 billion for the full year 2018. We expect our quarterly FCF deficit will increase sequentially from Q3 to Q4 as our year to date FCF is -$1.7 billion. We currently see next year’s negative FCF as roughly flat with this year 5%."
- Looking ahead, Netflix expects Q4 total streaming adds of 9.40M vs. 7.64M consensus.
- Of note, Netflix says part of the Q3 EPS beat is attributable to marketing costs being pushed into Q4.
- Source: Netflix Q3 shareholder letter
- Upcoming: Netflix earnings call webcast
- Previously: Netflix beats by $0.21, revenue in-line (Oct. 16)
- NFLX +13.23% AH to $393.00
- Now read: Netflix: No Pressure On Forward Estimates, But Some Cash Flow Would Be Nice
Original article