Higher Subscriber Growth for Netflix, Shares Pricey

Netflix reported better-than-expected subscriber growth in both the international (5.46 million net adds versus guidance of 4.90 million) and U.S. segments (1.96 million net adds, versus guidance of 1.45 million). Management persists in attributing its net add outperformance to excitement around original content and the continued adoption of streaming video. Netflix continues to expand its streaming base, ending the quarter with more than 118.90 million global paid subscribers, up from 94.36 million a year ago. Revenue of $3.70 billion came in just ahead of our $3.59 billion estimate with the majority of the beat coming from domestic streaming ($1.82 billion actual versus $1.75 billion estimate). Domestic streaming monthly revenue per paid member came in at $11.25, up 12% year over year and ahead of our $10.85 estimate. For international streaming, revenue of $1.78 billion was slightly above our $1.74 billion estimate as monthly revenue per paid member came in at $9.77, up 21% year over year.

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