Netflix Beats The Street In Q4 By Adding 4.3M New Streaming Subscribers Worldwide

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Netflix released fourth-quarter and full-year earnings numbers today, beating analyst expectations due to better-than-expected subscriber growth in the U.S. and abroad.

The company reported fourth-quarter earnings of $1.35 per share on revenues of $1.48 billion during the final three months of the year. That compares to Wall Street’s earnings forecast of 45 cents a share on revenue of $1.48 billion. Revenues were up from $1.18 billion a year ago, while earnings were up from 79 cents per share.

For the full year, Netflix reported earnings of $4.32 per share on revenues of $5.5 billion. That compares to $1.85 per share in earnings and revenues of $4.4 billion in fiscal 2013.

As always, the big thing analysts concerned themselves with was Netflix’s subscriber growth. In the fourth quarter, the company added 1.9 domestic subscribers, ending the year with 39.1 million in the U.S. That was up from 33.4 million a year before.

Internationally, Netflix added 2.4 million subscribers, up from 1.7 million a year ago. That growth was due in part to expansion into new international markets over the past year. Wall Street estimated that the company would add 1.83 million streaming subscribers in the U.S. and another 2.17 million overseas.

While Netflix watchers have been focused mostly on the domestic subscriber growth, that’s slowed in recent quarters. As a result, the company and analysts following it are looking for more growth to come through its international markets.

The company seemingly acknowledged this, saying in its management letter that the slowdown in growth was not due to price sensitivity. Instead, it called the slower growth a “natural progression” but said it was prepared for that.

“We think… the reduction in y/y net additions is a natural progression in our large US market as we grow. We have built in flexibility to our business model in terms of how quickly we grow content and marketing spend, so we intend to keep US contribution margins growing even with lower membership growth.”

On the international front, Netflix has been fairly aggressive in recent years. Starting with a launch in Canada back in 2010, the company has been introducing its streaming video service into new markets every few quarters.

In the third quarter, Netflix launched in France, Germany, Austria, Switzerland, Belgium and Luxembourg. It’s now in more than 50 markets worldwide, but is looking to expand more quickly in the next few years.

Later this quarter, Netflix will be expanding to Australia and New Zealand, but that’s just the tip of the iceberg. Now that it’s reached a certain amount of momentum, the company said in its management letter that it expects to complete its global expansion by the end of 2017.