Streaming video pioneer Netflix gained 5.1 million subscribers in the third quarter, surpassing Wall Street estimates by more than one million users, the company reported in its earnings report on Thursday. Netflix shares were volatile in after-hours trading.
Investors expected Netflix to add 4 million subscribers between July and September, according to analyst estimates compiled by Lseg. New programming during the period included the thriller series “The Perfect Couple” and the romantic comedy “Nobody Wants This.”
Diluted earnings per share came in at $5.40, above the consensus estimate of $5.12. Revenue reached US$9,825 million, slightly above the forecast of US$9,769 million.
Netflix has tried to divert investors’ attention from the number of subscribers to other parameters, such as revenue growth and profit margins. The company said its operating margin reached 30% in the quarter, up from 22% a year earlier.
“We have fulfilled our plan to re-accelerate our business and we are very happy to finish the year strong with a great fourth quarter”the company said in a letter to shareholders.
Netflix is working to increase revenue from its new ad-supported plans, But it has said it does not expect advertising to become a major driver of growth until 2026.
In the September quarter, the ad-supported Netflix serviceIt represented more than 50% of subscriptions in the countries where it was available.
