Netflix Passes 50M Subscribers As It Reports Better Than Expected Q2 Revenue Of $1.34B

This afternoon following the closing bell, Netflix announced the financial results of its second quarter, including revenue of $1.34 billion and earnings per share of $1.15. Analysts had expected Netflix to report $1.33 billion in revenue and $1.16 per share in earnings.

The company, which traded up around 1.7% during regular trading in a down market, is up around 1% after-hours following its mixed earnings report. Netflix’s year-ago second quarter in 2013 was disappointing, with top-line of $1.07 billion and earnings per share of $0.49.

In its most recent three-quarter period, Netflix saw its total subscriber base grow by 1.69 million to 50.05 million. Its domestic subscriber base grew 570,000, to 36.24 million. Its international subscriber base grew 1.12 million, to 13.8 million. The company had predicted that it would add 1.46 million new subscribers in the period, ending at an estimated total of 49.81 million. It beat that forecast.

In its sequentially preceding quarter, Netflix picked up 4 million new subscribers, of which 2.25 million were domestic.

The company ended the period with around $1.7 billion in cash, equivalents, and short-term investments.

Looking ahead, Netflix expect its second quarter revenue from streaming to total $1.224 billion, up from this quarter’s $1.146 billion. To that end, it expects its international loss from its streaming business abroad to grow from $15 million this period, to a nearly treble figure of $42 million. That’s a decent chunk of the $40 million revenue increase it expects from that business segment.

The company indicated in its letter to investors that it will introduce “in-store gift cards” in the Fall.

Recall that Netflix still has a large and healthy DVD business. Healthy in that it makes money, though its figures are in decline. The group contributed $92.8 million in profits during the quarter, on 6.3 million subscribers. Churn, oddly enough, is down, year-over-year, from 475,000 in the second quarter of 2013, to 391,000 in its most recent quarter. That decline could be due to the reductions coming from a smaller total subscriber pool.

Investors have bid Netflix slightly higher following the report, meaning that the larger Netflix report didn’t fail to meet expectations, and contained no surprising material weaknesses, it seems, but also that the street isn’t blown away.

The company’s net income of $71 million was up more than 100% from its year-ago tally.

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