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A quick look at Netflix’s Q4 numbers: $1.48 billion and earnings of 75 cents a share, excluding a one-time gain. Wall Street was looking for $1.46 billion and 45 cents a share.
More important are Netflix’s subscriber numbers. The streaming service says it ended the quarter with 39.11 million subscribers in the U.S. and 18.28 million in the rest of the world. Analysts expected about 39 million and 18 million respectively.
Wall Street, which crushed Reed Hastings three months ago, likes what it sees this time. The stock is up 13 percent after hours.
Hastings traditionally throws a bunch of interesting data points and arguments in his quarterly investor letter, and today he has a good one: He’ll start streaming Sony’s “The Interview” to U.S. and Canadian subscribers this Saturday — “just thirty days after it debuted in theaters and pay-per-view,” he notes.
Earlier today Sony announced “The Interview” had generated home video sales of $40 million; presumably it thinks it has maxed out the movie’s video-on-demand sales, since more than 40 million people will now be able to see it without paying a penny in a couple of days.
Hastings also addressed Wall Street’s concern that a price increase had slowed the company’s growth last quarter. Netflix thought so too, he says — but now he thinks that’s not the case.
Instead, Hastings chalks up last quarter’s below-target growth as a “natural progression in our large U.S. market as we grow” — i.e., the bigger Netflix gets in the U.S., the harder it will be for the company to grow.
But Hastings figures there’s still plenty of room left, and projects another 1.8 million subscribers this quarter. Some of that will come from “lower income areas of the U.S.,” which he says generated Netflix’s strongest growth.
The main takeaway from the rest of Hastings’ letter is that the company is increasingly confident in its push into original TV shows and movies. He says Netflix will show 320 hours of its own stuff this year, up 3x from last year, and that the push makes sense because “last year our original content overall was some of our most efficient content. Our originals cost us less money, relative to our viewing metrics, than most of our licensed content, much of which is well known and created by the top studios.”
And just in case you thought that “Marco Polo,” the big-budget miniseries Netflix rolled out to middling reviews last month, was a dud, Hastings says you’re wrong, citing … the Rotten Tomatoes movie-rating site.
Back to the numbers: Here’s RBC analyst Mark Mahaney’s Q4 cheat sheet, so you can play armchair analyst.
This article originally appeared on Recode.net.
