Benzinga - Streaming giant Netflix Inc (NASDAQ: NFLX) reported first-quarter financial results after market close Tuesday. Here are the key highlights from the report.
What Happened: Netflix reported first-quarter revenue of $8.16 billion, which was up 3.7% year-over-year. The revenue missed a Street estimate of $8.18 billion according to data from Benzinga Pro.
The company reported first-quarter earnings per share of $2.88, which beat a Street estimate of $2.86.
Netflix ended the first quarter with 232.5 million global paid subscribers, up 4.9% year-over-year. In the first quarter, the company added 1.75 million net new paid subscribers.
The UCAN (U.S., Canada) region saw 8% revenue growth year-over-year, EMEA (Europe, Middle East, Africa) region revenue was down 2% year-over-year, LATAM (Latin America) revenue was up 7% year-over-year and APAC (Asia Pacific) region revenue was up 2% year-over-year.
Netflix credited the success of returning shows like “Outer Banks,” “You,” “Ginny & Georgia and “Murder Mystery 2” during the first quarter. New shows cited in the report were “The Night Agent,” “Full Swing,” “The Glory” and “That 90s Show.”
The recently launched ad-supported tier from Netflix is seeing engagement “above our initial expectations” according to the company. Netflix said it is had minimal switching from the standard and premium pricing down to the ad-supported package.
The company saw increased revenue and accounts coming from its focus on password sharing. Some of the revenue benefit will shift from the second to the third quarter, according to the company.
Netflix said it is “all in” on streaming while its competitors continue to focus on “revenue diversification” using theatrical, linear TV and third-party licensing alongside streaming. The company said it is the leading streaming service based on engagement, revenue and profit.
“We don’t focus too much on the competition because we’ve learned over the years that consistently great execution is the key to our long-term success. We succeed by getting a bit better, a bit faster than the competition every month.
Netflix announced it will discontinue its DVD-by-mail service after 25 years. The service will continue to operate until September 29, 2023.
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What’s Next: Netflix is guiding for second-quarter revenue of $8.24 billion, which would be up 3.4% year-over-year. The company sees second-quarter earnings per share hitting $2.84.
The company said it will continue to focus on new plans and different price points around the world to help fit the demands of customers.
“As we improve our member experience with more must-watch stories, we also need to improve our monetization. This will not only help reaccelerate revenue growth and increase operating margin, it will also enable us to invest more in great entertainment,” the company said.
Long term, the company expects to sustain double-digit revenue growth, expand its operating margin and grow its free cash flow.
NFLX Price Action: Netflix shares are down 0.33% to $332.59 in after-hours trading Tuesday at publication versus a 52-week trading range of $162.81 to $379.43.
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