Netflix announced its first quarter earnings this afternoon.
Revenue was in line with expectations but EPS killed it, and the stock jumped about 20% after-hours.
We’re updating this post as we go, so click for updates.
The big numbers are:
- Revenue: $1.02 billion versus $1.02 billion estimate
- EPS: $0.31 versus $0.20
- Earnings guidance: Sees Q2 EPS $0.23-$0.48 versus expectations of $0.30 EPS
Here’s the full outlook for Q2 2013:
Netflix added three million subscribers in the first quarter bringing the total to 36 million.
They say two million of the new subscribers were added to the streaming business in the U.S. alone. Thia qA attributed in part to positive reception of the first original series House of Cards. International membership grew by one million.
In all markets Netflix saw growth and improved profits or reduced losses.
In regards to exclusive content and deals with other content providers, Netflix says that, “as we continue to focus on exclusive and curated content, our willingness to pay for non-exclusive, bulk content deals declines.”
The decision to release all 13 episodes of its first original series House of Cards worked in the company’s favour.
CEO Reed Hastings wrote in the investor letter that the decision created “enormous media and social buzz, reinforcing our brand attribute of giving consumers completely control over how and when they enjoy their entertainment.”
Netflix was widely criticised for its decision to release the entire series at once. Hastings said, “some investors worried that the House of Cards fans would take advantage of our free trial, watch the show, and then cancel. However, there was very little free-trial gaming—less than 8,000 people did this— out of millions of free trials in the quarter.”
Here’s the full investor letter: