Daniel Ives, head of technology research at GBH Insights, wrote in a note to clients late Monday that the company's subscription growth demonstrates that its worldwide strategy is paying off.
Q1 United States subscriber growth guidance (net additions): Wall Street estimates 1.28 million net adds. More importantly, Netflix beat the net subs on both domestic and global subs: Domestic streaming net adds of 1.98 million beat consensus estimates of 1.28 million.
While rival media companies merge, fire staff and fret about the future of their businesses, Netflix keeps chugging along, adding customers at home, in Europe and Latin America. Fourth-quarter sales grew by a third to $3.29 billion, the company said, while earnings nearly tripled from a year prior to 41 cents, meeting estimates. It's been almost six months since Disney said it planned to pull its movies from Netflix in favor of its own service.
Netflix CEO Reed Hastings uses the rest of his letter to hit on themes he has come back to for many years: The company is growing, competition is growing, and Netflix's spending on original content is growing.
Netflix was conservative with its fourth-quarter guidance because of the price increases announced to its service plans in early October, Netflix Chief Financial Officer David Wells said on an investor webcast Monday. 8,340,000 shares of the company's stock were exchanged, compared to its average volume of 6,720,000.
According to a report by Deadline, original fantasy/action film lead the streaming services' pack of original content - which also includes popular titles such as Black Mirror, Stranger Things, and Marvel's The Punisher - in giving Netflix its highest quarter gains in its history.
Netflix's success has inspired fellow tech giants Facebook Inc., Apple Inc. and Amazon.com Inc.to try their hand at original programming.
"The market for entertainment time is vast and can support many successful services", Netflix said. Yet Netflix enjoys a head start on all those players.
Finally, NFLX expects Q1 global net subscriber additions of of 6.35 million, with 1.45 million in the US and 4.90 million internationally.
Despite the price hike of about 10%, Netflix saw very little affect on its new sign-ups, Hastings says.
The US business, where growth had been slowing, also showed vigour.
At least eight brokerages raised their price targets for the company's shares by as much as $50.
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"In 2017, average streaming hours per membership grew by nine percent year-over-year". It also handily beat the analyst consensus forecast of 6.37 million, according to FactSet.
Paid memberships total 110.64 million, including 52.8 million in the USA and 57.83 million internationally.
Viewers were attracted by new seasons of shows including The Crown.
Still, Netflix expects more ups than downs in the upcoming year.
Netflix on cash flow: "In Q4, free cash flow amounted to -$524 million, bringing full year 2017 FCF to -$2.0 billion, at the lower end of the -$2.0 to -$2.5 billion range we had previously indicated".
Investors appear confident in Netflix's ability to grow.
"Netflix is pouring more and more money into making content, and it is directly translating into more subscribers", BTIG analyst Richard Greenfield said.