Considering that Netflix ended its first quarter with 98.5 million total subscribers, Jefferies analyst John Janedis said the fact that the company already expects to crack 100 million this weekend means it has already significantly chipped away at its second-quarter growth guidance. It seems most picked up on a comment management made about the company being close to passing 100 million subscribers in total.
The company said first-quarter profit soared to $US178 million, or 40 cents a share, compared with analysts' predictions of 37 cents.
"We have a large market opportunity ahead of us", Netflix said. "But Netflix clearly had a vision before those devices became so ubiquitous", he added.
Netflix would be less hard hit than many major networks because "we're not on such a rigid production schedule" to accommodate fall or summer seasons, he added.
Indeed, the company noted that the United States and other established markets have been funding worldwide expansion for several years.
Los Gatos, the company in California has a current market value as $US63 billion. Management spent time discussing the increasing competition in Internet TV, including the news that Amazon will take over Twitter's role in streaming the Thursday night National Football League games. Other cable channels are also offering internet-only options as more viewers avoid other traditional TV packages and get a subscription for streaming services.
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Netflix is spending a reported $6 billion on original content for 2017, which sounds like an astronomical figure. With almost 100 million users-which puts it significantly ahead of competitors like Amazon and Hulu-there are signs of saturation, particularly in the U.S. In the first quarter, Netflix added 1.42 million domestic users, which fell short of the anticipated 1.59 million.
Thanks to such subscriber growth, Netflix generated $2.64 billion in revenues for the quarter, up almost 35% on a year-over-year basis.
Netflix stock was down roughly 4% in the immediate aftermath of the earnings announcement, but rebounded and was up 1.4% in after hours trading on Monday.
The company's CEO said Netflix's biggest competition is actually sleep.
Netflix also called out the extension of its deal with Adam Sandler for an additional four films. Netflix said it will spend $1 billion marketing in 2017 to bring more attention to its shows.
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