Netflix shares surge on strong subscriber growth

2014 NY Pride- Netflix's Orange Is The New Black

On average, Wall Street analysts who track Netflix expected 98 cents.

The results caused Netflix's stock to go up more than 6% in after-hours trading. Insiders sold 445,545 shares of company stock worth $120,523,106 over the last quarter. That was due to the combination of adding 7.4 million new subscribers, the most ever for Netflix in a first quarter, plus the price hikes the company pushed through previous year, leading to a 14% increase in the average monthly subscription price. What is more surprising is Netflix added more streaming customers in its home country in the last 12 months than it did during the same stretch in 2015, when it was a far smaller company. Netflix expects to spend between $7.5 billion and $8 billion on content this year, with a profit margin of 10 percent to 11 percent.

In the first three months of the year, Netflix boosted original programing by 85 percent from a year earlier to a record 483 hours, according to Cowen & Co analysts. In the first quarter it debuted "Altered Carbon" and "The End of the F***ing World", in addition to returning seasons of "Marvel's Jessica Jones" and "Grace and Frankie".

Netflix said its non-English programming also is gaining traction. Additionally, Spanish language heist thriller La Casa de Papel became the most watched non-English series on Netflix ever during the period.

The company posted a first-quarter revenue of $3.7bn, up from $2.6bn year-over-year. Last week, Comcast agreed to include Netflix subscriptions in more of its cable packages, opening up a way for Netflix to connect with hard-to-reach potential new members, even though the two waged a public battle against each other in 2014 over net neutrality. Despite increasing spend on original content, that subscriber number is still mostly where it gets its market value because it's a forward predictor of its revenue.

The business's market capitalization stands at $137.2 billion, over twice a year earlier.

But it faces growing competition as technology companies such as Apple and Amazon pour money into premium programing, worldwide rivals jump into streaming and traditional media companies pursue digital customers.

Spotify's music-streaming service has emerged as the most celebrated of the aspiring clones, despite significant challenges that will make it hard to keep growing at the same pace as Netflix has been in video streaming.

Investors have appeared bullish on the company's ability to add more members.

Netflix's (NASDAQ:NFLX) stock climbed almost 6% in after-hours trading Monday, as the company posted its first quarter results, which were better than expected due to strong growth in subscribers. For the quarter, revenues rose 40.3% on a year-over-year basis to $3.7 billion, slightly above the $3.69 billion Capital IQ Consensus.

Revenue grew 43% year over year in Q1, the fastest pace in the history of our streaming business, due to a 25% increase in average paid streaming memberships and a 14% rise in ASP.

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