Netflix Beats Expected Subscriber Growth Yet Again

By Nitish Singh / April 17, 2018

Netflix has once again beaten its expectations on subscriber growth. With more than 7.4 million new sign-ups in Q1 2018, the streaming company is growing faster than ever. The new sign ups include 1.96 new accounts from the US and 5.46 new accounts from the rest of the world. The previous highest number of new subscribers in a quarter was 6.35 million. As of the end of March, Netflix has over 125 million subscribers.

Netflix Logo

Image Courtesy of Netflix

The massive growth rate of the streaming company has helped generate $3.7 billion in revenue for Q1 2018 and a net profit of $290 million. Netflix shares are also looking up with a 6% increase in the after-hours trading on Tuesday.

Wall Street analysts expected an increase of 4.84 million international subscribers in the first quarter and 1.48 million subscribers from the United States. The company performed far better than analysts’ expectations, and it is expected the streaming service will have a larger international audience than the US home market in the next three months. With the recent partnership with Comcast, Netflix seeks to increase awareness of the platform and make the sign-up process as easy as possible. Comcast will offer dual-membership options to allow existing Comcast subscribers to access Netflix directly without changing TV inputs at a discounted package.

With $8 billion to be invested this year on new content and aggressive marketing to rake in international subscribers, the streaming service shows no signs of stopping. The recent spurt in revenue is a result of new subscribers as well as an average increase of 14% in subscription price in Q4 2017.

Netflix’s marketing spending has gone up by a massive 77% in Q1 2018, to $479 million. The company is set to increase its marketing budget even further this year. For Q2 of 2018, Netflix expects 6.2 million subscribers to sign up for the service, higher than what Wall Street analysts are predicting. Despite $6.54 of long-term debt, the streaming company wants to keep investing in original content for both shows and movies.

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