Netflix (NFLX -0.51%) did it again. The company crushed expectations and delivered a blockbuster quarter featuring record net member additions, accelerating revenue growth, and skyrocketing profitability. The impressive results sent Netflix stock soaring. Shares finished Tuesday up about 10%.
Here's a look at nine ways Netflix obliterated expectations and continued to impress investors.
Image source: Netflix.
1. 8.33 million: In its fourth quarter, Netflix added 8.33 million new streaming members, bringing total members to 117.6 million. The net additions were far ahead of management's guidance for 6.3 million net member additions.
The better-than-expected member additions were primarily driven by the company's growing slate of original content and global adoption of internet entertainment, according to management.
The growth was particularly impressive in light of Netflix's membership price hikes.
2. 6.36 million: Netflix's 6.36 million international net adds were similarly significantly higher than management's guidance for 5.05 million international net adds.
3. 1.98 million: The company added 1.98 million new subscribers in the U.S. The figure was far ahead of the 1.25 million new subscribers it hoped to add domestically. In addition, it was well ahead of any quarterly domestic net member additions during 2017. In the first, second, and third quarters, Netflix added 1.42 million, 1.07 million, and 0.85 million subscribers, respectively. This figure was also notably higher than the 1.93 million subscribers it added in the U.S. during the year-ago quarter.
Image source: Getty Images.
4. 32.6%: Fourth-quarter revenue came in at $3.29 billion, ahead of management's guidance for revenue of $3.28 billion. The quarter's revenue similarly beat a consensus analyst estimate for $3.28 billion.
The revenue growth results highlighted the company's momentum as its year-over-year revenue growth rate accelerated to 32.6%, up from 30.3% in Q3.
5. 9%: Average paid members in the fourth quarter climbed 25% even though price increases to its service led to a 9% jump in Netflix's monthly average selling price. This 9% increase in its global average selling price was driven by 5% and 12% spikes, respectively, in average selling prices in the U.S. and internationally.
6. 39.8%: For the first quarter of 2018, management expects even faster revenue growth. The company guided for an impressive 39.8% rise in revenue compared to the year-ago quarter. This is would be Netflix's highest revenue growth rate since 2011.
Netflix expects the quarter's strong revenue growth to be driven by 6.35 million net member additions (significantly higher than the 4.95 million it added in the first quarter of 2017) and a higher average selling price for its subscriptions.
Image source: Netflix.
7. 7.5%: Operating profit margin, which management says is its primary profit metric, was 7.5% in Q4, above management's guidance for 7%. This is up from 6.3% in the year-ago quarter.
This strong operating profit margin was driven by a marked increase in the company's international contribution margin. At 8.7%, international contribution margin was well beyond its contribution margin of negative 7% in the year-ago quarter and the third quarter's 4.7%.
8. 10%: Netflix expects momentum in its profitability to continue, guiding for a full-year operating margin of 10% in 2018, up about 300 basis points compared to the 2017 operating margin.
9. 173%: Putting together Netflix's accelerating revenue growth and its improving profitability, the net effect on the streaming giant's overall profitability is exploding earnings per share, which skyrocketed 173% year over year in Q4.
In just nine metrics, it's easy to see why Netflix investors are optimistic.
