Netflix Adds 3 Million Subscribers, Revenue Surpasses $1 Billion
Netflix generated more than $1 billion in revenue in the first fiscal quarter of 2013, exceeding analysts' expectations for its financial results and underscoring the company's resurgence in recent months.
Netflix posted $2.7 million earnings, or $0.05 per share, after a $16 million charge for extinguishment of debt. Disregarding the debt, its earnings per share were $0.31. Analysts had predicted $0.19.
Netflix also added more than 3 million new subscribers worldwide in the same quarter it launched its most ambitious original series to-date, "House of Cards." As Netflix does not depend on advertising for revenue, it relies on new customers to boost its bottom line.
Its domestic subscriber base now sits at 29.17 million, exceeding HBO's sum of 28.7 million. Netflix has long expressed a desire to be the HBO of the digital age, compiling a vast and loyal user base with original shows and exclusive deals for movies and TV shows.
The company's stock price, now nearly double its value at the start of the calendar year, rose 6.7 percent on Monday prior to the results. Its stock surged after its last earnings report, when the company far exceeded expectations and announced close to 4 million new subscribers across the globe.
The street has changed its tune on Netflix after more than a year of doubts. Netflix's stock price was once near $300, a total most observers felt was far too high.
After a few corporate missteps, including an attempt to spin-off its DVD-by-mail business, Netflix's stock price plummeted throughout the second half of 2011. The company spent most of 2012 trying to regain Wall Street's faith by touting its new original shows and emphasizing its continued subscriber growth.
In a letter to shareholders on Monday, Netflix CEO Reed Hastings and CFO David Wells credited the company's increased emphasis on its streaming service and stressed the importance of new licensing deals for TV shows like 'Reovlution" and "Political Animals."
They also devoted an entire section of the letter to Original Series, which helped boost memberships totals.
"Some investors worried that the House of Cards fans would take advantage of our free trial, watch the show, and then cancel," they wrote. "However, there was very little free-trial gaming - less than 8,000."