Netflix appears to have killed it in Q3 with numbers that sent its stock price up more than 19% in post market trading.
The streaming company generated net income of $51.5 million, up 75% vs the period last year, on revenues of $2.29 billion, up 31.7%. The top line was slightly ahead of the $2.28 billion that analysts expected. But profits at 12 cents a share were well ahead of forecasts for 6 cents.
Just as important: streaming subscriptions beat forecasts. Netflix ended the quarter with 47.5 million domestic subs, an addition of 370,000. International was up 3.2 million to 39.25 million.
“We are now in the fourth year of our original content strategy and are pleased with our progress,” CEO Reed Hastings and CFO David Wells say in a letter to shareholders. “In 2017, we intend to release over 1,000 hours of premium original programming, up from over 600 hours this year.”
They expect to add 1.45 million domestic subscribers by year end, and 3.75 million internationally.
All told, “we will continue to operate around break even, and then start generating material global profits in 2017 and beyond, by marching up operating margins steadily for many years.”
The execs reiterated their plan to raise debt “in the coming weeks” to support their expansion plans. The company had $14.4 billion in streaming content obligations at the end of September, up $1 billion in the quarter. That was due to “the addition of both new original and non-original content to our library as well as expanded rights for our new territories.”
Netflix expects to spend $6 billion next year for content.