Netflix shares traded as much as 10% during Monday’s after-hours trading to $178.56 after the company delivered better than expected earnings report that beat the forecast of both the company and most analysts.
The company who has been investing heavily in the production of its original content not just in the United States topped its 100-million subscriber mark which has been achieved by the company during its first quarter earnings this year.
Netflix subscribers have increased by 5.2 million this quarter globally with 1 million coming from the United States and 4 million outside the country. The company’s total subscribers globally are now at around During the earnings call, Netflix’s profits have also risen by 61% to almost $66 million while its total revenue was up by 32% to $2.78 billion compared to the same quarter last year.
In a statement, Netflix stated that the company has underestimated the popularity of their original content leading into a better than expected earnings results.
Along with the release of their earnings numbers, the company also announced that they are making good progress with their international expansion and added that their investments in their markets outside the United States have resulted in improved profits that will support further expansion in new countries and regions. Although Netflix reported a loss of $13 million during the second quarter due to its international operations although more projects are expected to bring in higher profits during the next quarter.
Netflix will also increase its efforts and investments outside the United States primarily focusing on creating content exclusively for their European, Latin American, and even Asian countries. According to CEO Reed Hastings, the company is now studying and will be investing more on tapping into the Asian market. Netflix is set to invest another $6 billion on content for the current year for its original series and movies. Because of this, the company is expected to have a negative free cash flow in the next couple of years.
For the current quarter, Netflix is expected to release a couple of original series including The Defenders, the second season of Stranger Things, and Death Note. The company has also received incredibly high Emmy nominations last week for a number of its original hit series including The Crown, Stranger Things. Netflix has also recently updated its cancellation rate for its original shows after it canceled highly-reviewed shows such as Sense8 and Girlboss due to a small number of viewers according to various sources as Netflix has not directly commented on this matter.