Today, shares of Netflix (NFLX, Financial) soared 10% after the company posted third-quarter results on Thursday that topped analyst expectations. Netflix reported revenue of $9.83 billion, a 15% increase from the year ago quarter, also beating the estimate by $57.6 million. Net income rose to $2.36bn or $5.40 per share from $1.68 billion or $3.73 per share a year ago, while it also exceeded market expectations.
Total active subscribers went up by 14% to 282.72 million, just above Wall Street forecasts, although the growth rate was lower than in the last two previous quarters. According to analysts, the growth in the number of subscribers is due to increased password control, which makes users subscribe to Netflix individually.
Going forward, Netflix has forecast full-year revenues to rise by 15% year-over-year, thus reaching the upper limit of the guided range. The common is up over 41% year to date through Thursday’s close; the shares edged up more than 4% in after-market trading after the earnings report.
A major change of events was in store, and the company’s official statement declared that the reporting of the subscriber base would no longer be from the coming year, that is, 2025, and financial key performance indicators would instead be made available. The last subscriber update is expected later in the quarter, with Netflix broadcasting its initial NFL games on Xmas Day. KeyBanc analysts said that almost a quarter of a sample of non-subscribers of DirecTV confessed that the NFL games might make them decide to become the company’s clients.
Broadening the company’s programming stream, Netflix is to be named an official broadcaster of TKO Group (TKO, Financial) Holdings’ WWE professional wrestling shows from the following year. This decision supports the company’s efforts to turn to new content following enhanced competition in the streaming market.
This article first appeared on GuruFocus.
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