Netflix impresses Wall St. with robust 4Q overseas growth

Streaming revenue in the first quarter will total US$1.81 billion, Netflix said. Almost 12 million new subscribers joined Netflix from overseas in 2015. CEO Reed Hastings at CES this year said Netflix would launch in 130 new countries, which represents a massive opportunity for the company given that much of its growth is happening internationally.

Netflix added 5.6 million subscribers to its online streaming service in the fourth quarter, including more than 4 million from outside the United States, according to a company statement Tuesday. This is Netflix’s fourth year of making its own programming, and it plans to produce more than 600 hours of original content this year, up from roughly 450 last year.

Netflix is like TV’s incumbents in that it needs content, and it has to bid for the best programming against the likes of HBO, Hulu, Amazon, and many others.

Average subscriber price grew 4% to 5% during the period – excluding the impact of foreign currency.

Revenue of $1.82 billion (U.S.) was in line with projections for $1.83 billion but earnings of $43.2 million or 10 cents per share easily topped the consensus analyst estimate of two cents. Netflix says negative foreign exchange issues contributed to lower profitability.

Today, Netflix reported an global contribution loss of $109 million in Q4 that “increased sequentially due to these launches”, and projected worldwide losses of approximately $114 million for Q1 2016.

Netflix announced its year end and quarterly results yesterday, revealing that while it showed growth overall, it’s slowing in some markets. It added 1.56 million USA subscribers in the fourth quarter, below the 1.65 million it forecast, and less than 1.9 million a year earlier.

Despite its growing subscriber numbers, Netflix’s profits fell in the three months to December from a year earlier, although it said its earnings numbers were still positive.

“We’ll let them know at a certain date the price change takes effect”, said Netflix Chief Financial Officer David Wells.

Netflix is still losing money from its streaming business outside the U.S., and it expects to lose more – $US114 million ($164 million) next quarter. Account sharing is most prevalent in France, with 25% of Netflix users using a subscription that belongs to someone outside their household.