Netflix continues to grow, adding 5.3 million net subscribers this past quarter.
And it’s willing to spend the money to continue that trajectory, with a new content budget of between $7 billion to $8 billion for next year. The figure is up from the $7 billion figure chief operating officer Ted Sarandos previously said to Variety.
“While we have multi-year deals in place preventing any sudden reduction in content licensing, the long-term trends are clear,” the company said in a letter to shareholders. “Our future largely lies in exclusive original content that drives both excitement around Netflix and enormous viewing satisfaction for our global membership and its wide variety of tastes.”
Netflix latest earnings report beat analysts’ estimates, mostly on the back of its strong subscription net additions. The company reported earnings on Monday after the bell. Shares were up more than 2 percent during after hours trading after earnings posted.
- Revenue: $2.98 billion vs. $2.97 billion expected Thomson Reuters consensus estimate
- EPS: 37 cents per share vs. 32 cents per share, adjusted, according to a Thomson Reuters consensus estimate
- Subscriber net ads: 5.3 million versus 4.5 million, according to a Street Account estimate
The company now has about 109.3 million subscribers globally. Netflix said it added 850,000 subscribers in the U.S., ahead of the 810,000 Street Account estimate for the quarter. It boomed internationally, signing up 4.45 million subscribers versus the 3.69 million Street Account estimate. The subscription additions were up 49 percent year over year.
The company also issued guidance for the next quarter. The company also said it will spend $7 billion to $8 billion on content next year, up from the $7 billion.
- Q4 revenue: $3.27 billion versus the $3.15 million Thomson Reuters estimate
- Q4 EPS: 41 cents per share vs. 33 cents per share, adjusted, according to a Thomson Reuters consensus estimate
- Q4 Subscriber net ads: 6.3 million versus 6.25 million, according to a Street Account estimate
Analysts projected Netflix would post strong earnings, including a large number of new subscribers despite some subscription plan rate hikes. The stock price hit over $200 for the first time on Friday.
Next quarter the company will release its first original Italian and German shows, as well as new seasons of “Stranger Things” and “The Crown.” It will also debut its second David Fincher series “Mindhunter.” Fincher is an executive producer on “House of Cards.” In addition, the David Ayer movie “Bright” starring Will Smith will be released on the platform in December. Netflix reportedly paid $90 million for the Ayer film, according to Deadline.