Netflix disappoints Wall Street as it misses on Q1 guidance but revs rise and subscriber numbers swell | Major Businesses | Business
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The subscription video-on-demand (SVOD) leader Netflix may have disappointed Wall Street by missing some forecasts, but in absolute terms for the first quarter of 2017 has posted both revenue and subscriber growth.

Netflix OITNB iPad lifestyleFor the quarter ended 31 March, Netflix claimed 98.75 million streaming video subscribers worldwide, adding 4.95 million new members in the three-month period. This missed analyst estimates of 5.27 million and its own guidance of 5.2 million. New domestic members came in at 1.42 million, versus Wall Street forecasts 1.59 million, and Netflix guidance of 1.5 million.

In terms of revenue, Netflix saw a 35% year-over-year increase to reach $2.64 billion in the first quarter, meeting expectations, and EPS was $.40 per share, above the $0.37 that analysts expected. Wall Street had been modelling for Netflix to earn 24 cents a share excluding items on sales of $2.76 billion.

Netflix has revised its guidance upward for Q2, expecting to add 3.2 million new subscribers worldwide, well above Wall Street's forecast for 2.45 million, and Netflix CEO Reed Hastings said he expects the service to pass the 100 million subscriber milestone any day. It also expects to earn $.15 per share vs. $.09 a year earlier, on sales of $2.76 billion, up 31%, for the second quarter.

“We remain incredibly excited about the opportunity in front of us to build a truly global and durable internet TV business,” Hastings said in a letter to investors. “The opportunity provided to us by the growth of the global internet is gigantic and our plan is to keep investing as we increase membership, revenue and operating margins.”

He added that Netflix expects to have a negative free cash flow for “many years” thanks to content costs — the linchpin to growing its customer base.

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