Netflix's second-quarter net profit increased 61% year-on-year, with total number of users exceeding 100 million

The financial report showed that Netflix's second-quarter revenue was US$2.785 billion, an increase of 32.3% compared with US$2.105 billion in the same period last year; net profit was US$66 million, an increase of 61% compared with US$41 million in the same period last year.

On July 18, US video streaming service provider Netflix today released the company's second-quarter 2017 earnings report. The financial report showed that Netflix's second-quarter revenue was US$2.785 billion, an increase of 32.3% compared with US$2.105 billion in the same period last year; net profit was US$66 million, an increase of 61% compared with US$41 million in the same period last year.

Netflix's second-quarter revenue slightly exceeded Wall Street analysts 'previous expectations, while earnings per share missed expectations. At the same time, Netflix's net increase in global streaming service subscribers exceeded expectations during the quarter, and the total number of subscribers exceeded the 100 million mark, driving its after-hours share price up by more than 10%.

Results details:

In the fiscal quarter ended June 30, Netflix's revenue was $2.785 billion, a 32.3% increase from $2.105 billion in the same period last year, slightly exceeding analysts 'previous expectations. A survey by financial information provider FactSet showed that analysts on average expected Netflix's second-quarter revenue to be $2.76 billion. Total streaming service revenue for the quarter was $2.671 billion, up from $1.966 billion in the same period last year. Among them, total streaming service revenue in the United States was US$1.505 billion, up from US$1.208 billion in the same period last year; total streaming service revenue in the international market was US$1.165 billion, up from US$758 million in the same period last year.

Netflix's second-quarter revenue cost was $1.902 billion, up from $1.473 billion in the same period last year; marketing expenses were $274 million, up from $216 million in the same period last year; technology and development expenses were $267 million, up from $207 million in the same period last year; general and administrative expenses were $214 million, up from $138 million in the same period last year.

Netflix's second-quarter net income was $66 million, a 61% increase from $41 million in the same period last year; earnings per share were $0.15, up from $0.09 in the same period last year, but failed to meet analysts 'previous expectations. A FactSet survey shows that analysts, on average, expect Netflix to earn $0.16 per share in the second quarter.

Operating profit for the quarter was $128 million, up from $70 million in the same period last year; operating profit margin was 4.6%, up from 3.3% in the same period last year; net cash used for business operating activities was $535 million, compared to $226 million in net cash used for business operating activities in the same period last year; free cash flow was-608 million, compared to-$254 million in the same period last year; EBITDA (earnings before interest, taxes, depreciation and amortization) was $190 million, up from $129 million in the same period last year.

Overall, the video service company posted a net increase of 5.2 million global streaming service users in the second quarter, compared with an increase of 1.68 million in the same period last year. Among them, the number of new users in the United States was 1.07 million, compared with 160,000 in the same period last year, while analysts surveyed by FactSet expected Netflix to add 631,000 new users in the U.S. and Canadian markets during the quarter; The number of new international users was 4.14 million, compared with 1.52 million in the same period last year, exceeding the average forecast of 2.6 million by analysts surveyed by FactSet. As of the end of the second quarter, the total number of Netflix's global streaming service users reached 103.95 million, compared with 83.18 million as of the end of the second quarter of 2016.

Performance Outlook:

For the current third quarter of fiscal year 2017, Netflix expects that the number of new users of its streaming service will reach 4.4 million, of which the number of new users in the U.S. market is expected to reach 750,000, and the number of new users in the international market is expected to reach 3.65 million.

At the same time, Netflix also predicts that the company's revenue in the third quarter of fiscal 2017 will reach US$2.969 billion, a year-on-year increase of 29.6%; operating profit will reach US$204 million, and operating profit margin will reach 6.9%; net income is expected to reach US$143 million, and earnings per share will reach US$0.32. Among them, revenue from streaming services is expected to reach US$285,900, a year-on-year increase of 32.5%; the total number of users is expected to reach 108.35 million, of which the total number of paying users is expected to reach 103.64 million.

Stock price reaction:

On the same day, Netflix shares rose US$0.58 to close at US$161.70 in regular trading on the Nasdaq Stock Market, an increase of 0.36%. In subsequent after-hours trading as of 16:53 EST (4:53 Beijing time on the 18th), Netflix's share price rose again by US$17.04 to US$178.74, an increase of 10.54%, standing above the 52-week high. In the past 52 weeks, Netflix's stock price has dropped from $84.50 to $166.87. So far this year, Netflix shares have risen nearly 31%, outperforming the S & P 500, which has gained nearly 10% over the same period.

Editor: Mary