Netflix shares soared up to 15 percent after the company beat earnings estimates during its latest quarterly report on Tuesday. The company posted in its third-quarter earnings report:
- Revenue: $4 billion vs. $4 billion estimated, per a Refinitiv consensus estimate
- Earnings per share (EPS): 89 cents vs. 68 cents estimated, according to a Refinitiv consensus estimate
- Subscriber additions: 6.96 million
- Domestic subscriber additions: 1.09 million vs 673,800 estimated, per FactSet
- International subscriber additions: 5.87 million vs. 4.46 million estimated, according to FactSet
Netflix is showing accelerating growth as the company expands. Streaming revenue grew 36 percent year-over-year during the third quarter, though international revenue was down $90 million due to year-over-year impact from currency.
The company is projecting it will add 9.4 million net subscribers during the fourth quarter. In addition, it said it would be reclassifying some revenue to reflect how its producing more of its own content.
“Next quarter, we expect to reclassify certain personnel costs from G&A to Content and Marketing, and from Technology & Development to Other Cost of Revenues,” the company wrote in a note to shareholders.
Analysts from Morgan Stanley, Goldman Sachs and Raymond Jamescut their price targets on Netflix ahead of its earnings report, due to a combination of the strength of the dollar, rising interest rates and increasing expenses for the company.
Still, Netflix shares are up 78 percent this year, as consumers continue to cut the cord. EMarketer projects more than 60 percent of the U.S. population will be using over-the-top services like YouTube, Netflix, Amazon, Hulu and HBO Now by the end of the year, an increase of 3 percent from a year earlier.
