Netflix just released its earnings letter for the first quarter of 2019. The company says it saw growth of 9.6 million paying subscribers, up 16 percent year-over-year.
That’s significantly ahead of the 8.9 million new subscribers that analysts had predicted. On the financial side, the quarter came in right at expectations, with revenue of $4.5 billion and earnings per share of 76 cents.
Netflix says it now has 148.9 million paid streaming memberships. Most of this growth (7.9 million of the net additions in Q1) is happening internationally.
Things aren’t looking quite as strong in Q2, with Netflix forecasting 5 million net additions, which would be 8 percent lower than growth during the same period in 2018.
As of 4:36pm Eastern, Netflix shares are down about 1.8 percent in after-hours trading, presumably in response to that Q2 forecast.
This comes as Netflix is rolling out significant price hikes in the United States, Brazil, Mexico and parts of Europe.
“The response in the US so far is as we expected and is tracking similarly to what we saw in Canada following our Q4’18 increase, where our gross additions are unaffected, and we see some modest short-term churn effect as members consent to the price change,” the company says.
The letter also includes viewership numbers about several of Netflix Originals. (Remember: This isn’t an apples-to-apples comparison with standard TV ratings.)
It says “The Umbrella Academy” was viewed by 45 million member households during its first four weeks on the service, “Triple Frontier” was viewed by 52 million households and “The Highwayman” is on-track to be watched by more than 40 million households. On the nonfiction side, the service’s Fyre Festival documentary was viewed by more than 20 million households.
The letter also says Netflix will be testing something new in the product in Q2, by releasing weekly top 10 lists of popular content for U.K. viewers: “For those who want to watch what others are watching, this may make choosing titles even easier.”
And of course, Netflix also faces increasing competition, with Apple and Disney both revealing more details about their upcoming streaming services in recent weeks.
Here’s how the letter discusses those announcements.:
Both companies are world class consumer brands and we’re excited to compete; the clear beneficiaries will be content creators and consumers who will reap the rewards of many companies vying to provide a great video experience for audiences.
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.