Netflix Inc. (NFLX, Financial), a major internet streaming network, said the company finished 2017 with record new membership additions during the last three months of the year.
For the quarter, the Los Gatos, California-based company reported revenues of $3.286 billion and net earnings of 41 cents per share, meeting analyst expectations.
Company accelerates revenue growth during the year
Netflix registered a record 8.3 million global net adds for the quarter, eclipsing the prior record of 7.05 million global net adds in fourth-quarter 2016. The global net adds included a record 6.36 million new memberships internationally, primarily driven by the ongoing global adoption of internet entertainment. The increasing membership base contributed to 32.6% year-over-year revenue growth, approximately 1.3% higher than the comparative figure from the prior quarter. Netflix’s three-year revenue growth of 25.10% outperforms 91% of global diversified media companies.
Company offers strong growth potential for the upcoming year
Netflix said its big investments in content are paying off: the company’s average streaming hours per membership increased 9% year over year primarily due to “big hits” like "13 Reasons Why," "Stranger Things" and "Bright." The company mentioned that competition in the streaming industry, highlighted by advancements from Amazon.com Inc. (AMZN, Financial), Apple Inc. (AAPL, Financial), Facebook Inc. (FB, Financial) and Alphabet Inc.’s (GOOGL, Financial) YouTube, allowed Netflix to thrive over the past 10 years.
Netflix reported approximately $838.68 million in operating income for 2017, up approximately $459 million from 2016. The company forecasted a 10% operating margin in 2018, approximately 3% higher than its September 2017 margin of 7%.
Netflix traded at $227.58 at market close Jan. 22, up 3.23% from the previous close of $220.46. The share price rose an additional $20 when Netflix released its fourth-quarter earnings.
Disclosure: The author has no positions in the stocks mentioned.
