Netflix shares typically fluctuate widely after earnings, and this quarter was no exception. Net income came in at 89 cents per share, beating Wall Street's number by 21 cents a share. The company added 6.96 million overall paid users, topping Wall Street's expectation of 5.15 million additions, and an internal projection of about five million.
Netflix also posted strong subscriber growth - a key barometer of the company's performance. "Amid these massive competitors on both sides, plus traditional media firms, our job is to make Netflix stand out so that when consumers have free time, they choose to spend it with our service", Netflix said. In last year's third quarter, it earned 29 cents a share. The stock rose as much as 17 per cent in after-hours trading to US$405, and the market value of the company once again challenged media giants such as Comcast Corp., the largest United States cable provider, and Walt Disney Co, the world's largest entertainment company.
"It was a surprisingly good quarter that caught a lot of the financial community off guard", said Jim Nail, a senior analyst at Forrester Research. "Eventually your market may not be able to hold your growth ambitions".
In all, Netflix added nearly 2 million more subscribers than the 5.09 million Wall Street expected. Sales jumped 34% to $4 billion and global streaming revenues jumped 49% to $1.97 billion with revenues in the United States increased 25% to $1.94 billion. This brings Netflix total subscribers to 137 million a userbase that is only behind YouTube's 192 million when looking at streaming services. "Even the United States number was better than I thought it would be".
Shares of Netflix have done well in 2018, up about 80 percent on the year even as other tech stocks have taken it on the chin this month amid weakness in so-called FAANG group: Facebook, Apple, Amazon, Netflix and Google. But no one grew their Instagram audience as much as "Stranger Things" star Millie Bobby Brown, who apparently had close to no fans on the platform before the debut of the show, and now has 17.6 million Instagram followers.
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Rivals have long groused that Netflix can spend ungodly sums without ever having to make money itself.
Netflix has spent almost $7 billion on programming through the first nine months of the year, and plans to boost its investment in the years to come.
Media companies that once sold programs to Netflix for hundreds of millions of dollars are now building their own on-demand services to compete head on.
Netflix released a series original movies as part of its "Summer of Love" over the past few months, including "Set It Up", "The Kissing Booth", "Like Father", "Sierra Burgess Is a Loser" and the aforementioned "To All the Boys I've Loved Before".