Netflix, Inc. (NASDAQ: NFLX) is making a run for the top early on in the pre-market hours, and for good reason. The company reported its earnings for the first quarter of 2018, blowing away expectations and exciting investors. Of course, the excitement is leading to big gains in the value of the stock. Today, we’ll talk about:
- What we saw from the Q1 results;
- what we’re seeing from NFLX as a result; and
- what we’ll be watching for ahead.
NFLX Smashes Q1 Expectations
As mentioned above, Netflix is having an overwhelmingly strong start to the trading session in the pre-market hours this morning, and for good reason. The company released its earnings results for the first quarter, blowing away expectations. Here’s what we saw from the report:
- Revenue – During the first quarter, NFLX saw some pretty serious revenue growth. During the quarter, the company generated revenue of $3.7 billion. That works out to be an increase of 40% on a year-over-year basis!
- Net Income – Net income results proved to be just as impressive as revenue, if not more so. During Q1, the company said that net income came in at $290.1 million. That works out to $0.64 per share. Not only did this figure top forecast, it showed a year-over-year increase in the amount of 62.8%.
- Users – While revenue and net income were smashing hits, the real excitement seems to have come from user growth. During the quarter, the company generated 1.96 million new users in the United States and 5.46 million new users around the world. Analysts were expecting US users to grow by 1.5 million and global users to grow by 5 million. However, the figure didn’t just beat expectations, it was the strongest quarter in terms of subscriber growth that NFLX has seen in around 16 years.
In a letter to shareholders, the company had the following to offer:
Last year, we expanded our efforts in original programming to unscripted shows across several genres. Our output in this area is now comparable to similarly-focused US domestic cable networks… Shows like Queer Eye and Nailed It are great examples of our ambitions in this area: engaging, buzz-worthy shows that drive lots of enjoyment around the world.
What We’re Seeing From The Stock
One of the first lessons that we learn when we start to dabble in the market is that it’s important to keep a close eye on the news. After all, the news moves the market. In this particular case, the news released by Netflix proved to be overwhelmingly positive. With such strong earnings, it only makes sense that the stock is flying in the pre-market hours this morning. At the moment (8:27), NFLX is trading at $329.60 per share after a gain of $21.82 per share (7.09%) thus far today.
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What We’ll Be Watching For Ahead
Moving forward, the CNA Finance team will continue to keep a close eye on NFLX. In particular, we’re interested in following the continued and strong subscriber growth that the company is seeing. Nonetheless, we’ll continue to follow the story closely and bring the news to you as it breaks!
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