Netflix (NFLX) released strong first-quarter earnings Monday, showing subscribers continue to flock to the video streaming service despite price hikes.
The company added 7.4 million subscribers during the first three months of the year, ending March with 125 million worldwide. The performance surpassed analyst projections of 6.5 million new subscribers, which helped lift Netflix’s stock by more than 6 percent in extended trading.
Most of the new subscribers were international, but the service also added 1.96 million new U.S. accounts — half a million more than analysts had expected.
Revenues for 2018’s first three months increased 43 percent from a year ago, to $3.7 billion. That’s the fastest pace for a quarterly revenue increase in Netflix’s history, the company said, and it came despite a price hike in the first quarter. Netflix expects to spend between $7.5 billion and $8 billion on content this year, with a profit margin of 10 percent to 11 percent.
“Overall, this was a ‘grand slam quarter’ for Netflix and should put any lingering worries to rest,” Daniel Ives, head of technology research at GBH Insights, wrote in a client note. The results show “the company’s aggressive international expansion strategy is bearing fruit and putting major fuel in the company’s growth engine for the rest of 2018 and beyond.”
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