Netflix Inc. (NASDAQ: NFLX) stock price dropped slightly following the release of its quarterly report. Here’s what you need to know.
Netflix is the world’s leading online movie-streaming service, with nearly 150 million subscribers worldwide and a subscriber year-on-year growth rate of around 25%. Recently, Apple Inc. (NASDAQ: AAPL) and Walt Disney Co (NYSE: DIS) announced they will be joining the online streaming space and will provide fresh competition for Netflix.
5 Things To Know About Netflix’s Quarterly
- Year-on-year revenue growth was 22%
- Operating income was $459 million, up from $447 million in Q1 2018
- Diluted EPS was $0.76, up from $0.64 in Q1 2018
- Global Streaming Paid Memberships reached $148.86 million – year-on-year growth of 25.2%
- Adjusted EBITDA was $584 million, up from $534 million in the prior corresponding period
9.6 Million New Paying Subscribers
Netflix recorded its best-ever quarterly paid net additions with 9.6 million new subscribers added. This is the figure that indicates the number of new paying subscribers minus the paying subscribers who have left the platform during the period.
This is a significant figure for Netflix, as its revenue growth tracks very closely to subscriber growth.
Netflix Q2 Forecasts
Netflix is forecasting an increase in year-on-year revenue growth to 26.1%, from 22.2% this quarter. Operating income is expected to be $616 million, a significant increase from the $459 million this quarter and the $462 million in Q2 2018.
However, net income is expected to be lower; around $249 million, down from $384 million in Q2 2018. Year-on-year subscriber growth is also expected to slightly decrease from 25.2% this quarter to 23.7%.
Netflix’s report mentioned the recent announcements from Apple and Disney regarding their own respective streaming services, but Netflix does not expect to be materially impacted by these announcements.
“We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on-demand entertainment is so massive and because of the differing nature of our content offerings”, the Netflix statement reads.
The Netflix stock price is down around 0.6% in after-hours trade. The quarterly report includes both positive and negative news, so overall the figures are largely what investors were expecting and are consistent with previous quarters.
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Disclaimer: Any information contained in this article is limited to general financial/investment advice only. The information has not taken into account your specific needs, goals or objectives, so please consider consulting a licenced and trusted adviser before acting on the information. Please read The Rask Group’s Financial Services Guide (FSG) for more information. This article is authorised by Owen Raszkiewicz of The Rask Group, which is a corporate authorised representative No. 1264179 of Strawman Pty Ltd (ACN: 610 908 211) (AFSL: 501 223).
Disclaimer: At the time of writing, Max does not own shares in any of the companies mentioned.