Netflix released its fourth quarter earnings report after closing bell tonight, posting earnings of 10 cents per share, adjusted earnings of 7 cents and revenue of $1.82 billion. Analysts had been expecting earnings of 2 cents per share and revenue of $1.83 billion. In the fourth quarter of 2014, the video streaming company posted earnings of 10 cents per share and $1.49 billion in revenue.
Netflix records record subscriber adds
Netflix added 5.59 million subscribers during the quarter, including 1.56 million domestic and 4.04 million international streaming subscribers. Management had guided for approximately 5.15 million net new subscribers, while the consensus estimate was at 5.13 million. Netflix’s total subscribership at the end of the quarter was 74.76 million, of which 45 million were in the U.S.
Total streaming revenue was $1.672 billion. Management reported that their original content helped boost subscriber numbers. EBITDA was $111 million.
For the first quarter, Netflix management expects streaming revenue of $1.813 billion and total net adds of 6.1 million, of which they expect 1.75 million to be U.S. subscribers and 4.35 million to be international.
Netflix funds international expansion
The big reason Netflix’s earnings number was expected to be so low this time around was because of its massive amounts of investment into international expansion, but Wall Street was pleasantly surprised. The firm had been expected to be entering countries throughout this year, but earlier this month, management announced that they had added 130 new countries, putting the company in nearly every country around the globe. The most notable exception was China, although CEO Reed Hastings said this week that this might change soon.
Of course now that much of the infrastructure for the new countries is in place, Netflix now must turn its attention to acquiring content for those markets. Currently the video streaming company is offering very little content in the new markets, and much of the content it does offer is in English rather than the local languages. However, one firm found a surprising number of English-speaking households in many of the new markets, which is certainly good news for Netflix.
Shares of NFLX surged by more than 9% after tonight’s earnings report, climbing as high as $117.50 after closing the regular trading day up 3.7%.