Netflix added 5.20 million new subscribers in the second quarter for a total 104 million at the end of June, well ahead of its outlook for growth of 2.95 million. It expects another strong quarter in Q3, with a forecast for the addition of 6.40 million new customers.
The company added 1.07 million new streaming customers in the US in Q2, for a total 51.9 million, and the base grew by 4.14 million in the rest of the world to 52.0 million. DVD customers were down by 186,000 to 3.76 million.
Profit came mainly from the US, with a contribution of USD 560 million, followed by USD 148 million from the rest of the world and USD 62 million from DVD rentals. Netflix expects the international activities to remain profitable over the full year.
Netflix also continues to spend on its own content, with an expected 40 original productions to be released this year. Viewing time on its platform has grown to around 1 billion hours a week (compared to YouTube's recent milestone of 1 billion hours per day).
Quarterly revenues increased 32 percent year-on-year to USD 2.79 billion. While the investments in content lead to more depreciation and amortisation, the cost of sales remain limited, at 29 percent. This led to a 40 percent increase in gross profit. Marketing spend increased 27 percent, leading to a 46 percent rise in total contribution profit to USD 609 million. Other costs were up 39 percent, and total operating profit increased 82 percent to USD 128 million. A six-fold rise in interest costs dampened the growth in net profit to 61 percent, to USD 65.6 million.
