It was a quarter of big milestones for Netflix (NASDAQ:NFLX) on the subscriber front. Domestic, international, and total streaming accounts topped 20 million, 40 million, and 60 million, respectively.
Netflix closed out the quarter with 4.9 million more members to its streaming service than it had three months earlier, standing tall with 62.27 million subscribers at the end of March. It was targeting just 4.1 million net additions for the quarter back in January.
This is the fourth quarter in a row that Netflix has gained more international net streaming subscribers than stateside users, but that's not a surprise given Netflix's heady expansion into new territories. Domestic streaming still accounts for 70% of the streaming revenue and 66% of the subscriber base. The international audience will continue tugging at that rope. Australia and New Zealand, with an addressable broadband market of 8 million homes, launched late last month, and Japan is on tap as Netflix's next new country later this year. Netflix will also be shifting some of its marketing dollars overseas.
The better-than-expected boom in popularity shouldn't have come as much of a surprise. When Netflix tweeted last week that it delivered 10 billion hours of streaming content during the first three months of the year, we all knew it had a great quarter in terms of attraction and retention.
Revenue climbed 24% since the prior year's freshman quarter to hit $1.57 billion, in line with Wall Street's top-line projection, but posted results were held back by weakening foreign currencies. Netflix's net profit of $0.38 a share was well short of both the $0.86 it posted a year earlier and the $0.69 analysts were targeting, but the miss was solely the handiwork of the strengthening dollar. Netflix would have scored a profit of $0.77 a share adjusted for foreign currency fluctuations.
The market knew this was going to be a winner. Several analysts were scrambling to prop up their price targets on the stock in the days leading up to Wednesday afternoon's report. The stock also moved higher in seven of the nine trading days leading up to Wednesday's news, rising 15% along the way.
Netflix's report was enough to send Netflix crashing through yet another milestone -- hitting an all-time high in after-hours trading as it blasted north of $500.
Things should continue to get better. Netflix is looking to grow its streaming base by 2.5 million during the current quarter. That may not seem like much after welcoming in nearly twice as many net additions during the first three months of the year, but the second quarter is a seasonally sleepy period for Netflix. It added only 1.7 million net new streaming users during last year's second quarter.
Everything seems to be coming together for Netflix, even when the competition for premium streaming video services is starting to heat up. With a growing catalog to feed its engaged membership and strong international growth ahead the good times should continue for Netflix the company as the market wrestles with the heady valuation of the stock itself.