From the month of January to March, Netflix Inc.’s new range of original shows caught the attention of 7.4 million new subscribers. This news re-assured investors who are pretty sure that the video streaming powerhouse’s large spending will kick start growth globally.
New series such as “Altered Carbon” and “O Mecanismo” aided Netflix in surpassing analysts’ subscriber estimates. Netflix’s better than expected second quarter forecast also soothed worries regarding its prime competitors, Amazon.com Inc. and Apple Inc.
On Monday, Netflix’s shares surged over 7 percent during the after hours of trading to $330.30. The video streaming pioneer snagged the title as the top performer on the S&P 500 this year, edging up by over 60 percent.
Elazar Advisors analyst Chaim Siegel thinks that this is not only a onetime thing, he described it as quite the same to last quarter’s results and it’s going to get better.
According to data from FactSet, Netflix is expected to acquire 6.5 million new subscribers as stated by Wall Street. Not only did Netflix exceeded expectations, it is also bringing in 6.2 million more customers by the month of April through June, reaching 1 million more than analysts expectations.
In the year 2018, Netflix is planning to spend up to $8 billion on international TV shows and movies. Investors are now accepting negative free cash flow in exchange for the possible of outsized expansion in the coming years.
During the quarter that concluded in March 31, the company’s net income increased to $290.1 million from $178.2 million from the previous year.
Revenue grew 40 percent year after year to $3.7 billion marking that fastest pace in the video streaming giant’s history.