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You liked “Stranger Things”? “Narcos,” too?
So does everyone, Netflix says: It said those two shows, along with other stuff Netflix is now producing for itself, drove subscriber numbers above expectations in Q3. Now Wall Street likes Netflix, and its stock is up nearly 19 percent.
This is a big turnaround from last quarter, when Netflix blew its numbers, and apologized to investors for doing so. Netflix says it is feeling good about Q4, too, and is offering subscriber estimates well above Wall Street estimates.
If you care about the numbers, you have probably already checked in with Netflix IR, but for the record: Netflix added 400,000 members in the U.S. last quarter, and 3.2 million in the rest of the world. Three months ago, it told Wall Street it was aiming for 300,000 and two million, respectively.
Netflix thinks it will add 1.45 million subs in the U.S., and another 3.75 million internationally; Wall Street was thinking it would say 1.3 million and 3.3 million.
And while Netflix’s critics like to point out that it doesn’t make money, it did eke out a (very) modest profit of $51.5 million, and generated earnings of 12 cents per share — double what Wall Street thought.
When Netflix blew its Q2, it said one of the reasons was that subscribers had been spooked by reports of its coming price hike — “ungrandfathering,” in Netflixspeak. Now it says the price hike — Sorry! Ungrandfathering! — is going just fine.
Netflix says it will use that money to help pay for a $6 billion content bill in 2017, and that an increasing amount of it will be spent on stuff that Netflix makes or orders. The company says it will generate more than 1,000 hours of “premium original programming” next year, up from 600 hours this year.
One thing that won’t happen next year: An expansion into China, the one big market the company hasn’t reached yet. Netflix, which had already signaled that it wasn’t optimistic about China, now says it’s a no-go, for now, because “the regulatory environment for foreign digital content services in China has become challenging.” So instead of operating in China, the company will sell some of its own programming to people who already do business there:
“We still have a long term desire to serve the Chinese people directly, and hope to launch our service in China eventually.”
This article originally appeared on Recode.net.
