Netflix reported first-quarter customer numbers slightly below expectations, but said it still sees "gigantic" potential for international growth. The company recorded a total of 4.95 million net streaming customers additions, down from 6.74 million net adds the year earlier and just off its guidance of 5 million.
The company had earlier said this quarter would be somewhat slower on the back of a strong comparison year and new series releases weighted towards the second half. The US had net adds of 1.42 million, and the figure reached 3.53 million internationally (-22%), giving the company a total base of 98.75 million subscribers at the end of March. Netflix expects to pass the milestone of 100 million customers in the coming days.
Total revenues jumped to USD 2.637 billion from 1.958 billion the year before and against the company’s guidance of 2.5 billion. Streaming revenue rose almost 40 percent year-on-year to USD 2.516 billion. Group net profit lifted to USD 178 million from 28 million, with an operating margin advancing to 9.7 percent from 2.5 percent. EBITDA leaped to USD 317 million from 107 million.
Netflix is guiding for a lower second quarter, with 3.20 million net streaming adds, including 0.60 million in the US and 2.60 million internationally. Total revenues are still seen rising strongly, by almost 31 percent to USD 2.755 billion, with total streaming revenues going 34.3 percent higher to USD 2.640 billion. The net profit is estimated at USD 66 million, with the operating margin at 4.4 percent.
Netflix noted rapid growth in Latin America, Europe and North America. It is also seeking to improve content offerings to match local tastes in Asia, the Middle East and Africa but expects this to take time. The company will continue to invest internationally, and will therefore likely take a small loss for Q2. Free cash flow in Q1 was at minus USD 423 million, higher than the cash flow loss at 261 million the year before, though an improvement from the fourth quarter.
