Netflix reports 40.3% growth YoY, adds 5.2 million new users in Q2 2018


Netflix today announced its revenue for Q2 2018 where the company has added 5.2 million new users, the same as Q2 last year, but lower than the 6.2 million forecast. The total revenue (including DVD) of the company came to $3,907 million which is a solid 40.3% growth YoY. It also reported an operating revenue of $462 million with an operating margin of 11.8%.

On the other hand, the revenue (streaming) of the company came $3,814 million that is a 42.8% YoY growth. The total income generated from the US is around $1,893 million, while the international streaming resulted in $1,921 million in the Q2 2018, while it is forecasting a $1,970 million for Q3 2018. The company says that streaming revenue in Q2 rose 43% YoY and it is driven by a 26% and 14% increase in average paid memberships and ASP, respectively.

The operating margin of 11.8% expanded 720 bps year over year, resulting in 262% growth in operating income. The EPS of $0.85 vs. $0.15 included an $85 million non-cash unrealized gain from F/X remeasurement on the Eurobond. The US net added a 0.7million which is down compared to same time last year Q2 where it recorded 1.1m. It also claims that the first six months of the year, the US net is slightly better than last year.

In the earnings announcement, Netflix said:

We are making good progress with our original feature films. As traditional exhibition focuses increasingly on superheroes and sequels, our on demand service allows us to serve a wide variety of tastes. For example, in Q2, we had success with several romantic comedies such as Set It Up, starring Lucy Liu, Zoey Deutch, Taye Diggs and Glen Powell and The Kissing Booth, which peaked at #4 on IMDB’s chart of most popular movies, behind only Deadpool 2, The Avengers: Infinity War and Solo: A Star Wars Story.