Netflix (NASDAQ:NFLX) is jumpinh in After hours trading after posting Q1 subscriber numbers above estimates. Here is what you really need to know about the quarter.
The company reported 1.96M domestic streaming additions vs. 1.48M consensus and guidance for 1.45M guidance.International streaming additions rose to 5.46M during the quarter vs. 4.98M consensus and guidance for 4.90M
Total streamings adds were 7.41M for the quarter vs. 6.32M consensus. Total memberships were 125M at the end of the quarter.
Q1 U.S. streaming contribution margin increased to 38.3% from 34.4% last quarter. The international contribution margin rate was 15.3%.
The company’s operating margin jumped to 12.1% from 7.5% in Q4.
Netflix on cash and debt: “We have about $2.6 billion in cash and we will continue to raise debt as needed to fund our increase in original content. Our debt levels are quite modest as a percentage of our enterprise value, and we believe the debt is lower cost of capital compared to equity.”
Netflix on content spending: “We’ll have $7.5-$8 billion of content expense (on a P&L basis) in 2018 across a wide variety of formats (series, films, unscripted, docs, comedy specials, non-English language) to serve the diverse tastes of our growing global membership base.”
Looking ahead, Netflix expects Q2 total streaming adds of 6.20M vs. 6.30M consensus
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