Netflix customer growth slows in US, still strong abroad

Netflix reported a slowdown in customer growth in the US in the third quarter, but grew faster than expected at its international activities. In the US, the company added 0.88 million new streaming customers, less than the 1.15 million forecast, for a total 44.83 million. Netflix blamed the weak performance on the transition to chip-based payment cards in the US, which led to higher "involuntary churn". 

At the international activities, the company gained 2.74 million customers, more than the 2.4 million forecast, for a total 25.99 million customers at the end of September. Total revenues from streaming rose to USD 1.581 billion from 1.223 billion a year ago, in line with the company's guidance, while net profit dropped to USD 29 million fro USD 59 million due to the costs of expanding abroad. Continued spending on original content led to negative free cash flow of USD 229 million in the quarter. 

Netflix said losses from the international operations are expected to increase on a sequential basis in Q4 to around USD 117 million, as the streaming service launches in the new markets of Portugal, Spain and Italy. With more launches in Asia planned for early 2016, Netflix said it's on track for global coverage by the end of 2016. For the fourth quarter, customer growth is forecast at 1.65 million in the US and 3.50 million abroad, and revenues are expected to grow to USD 1.67 billion.