Netflix has revealed its shareholder letter for the third quarter of 2019, which has revealed its most accurate guidance forecast for new subscribers in its entire history.
The report began by saying revenue is up 31% over the prior year, growing to $5.2 billion. Furthermore, operating income has doubled to $1.0 billion. Most significantly, the paid net adds – or new subscribers – comes to a total of 6.8m, which is very close to the company forecast of 7.0 million.
This increase in total paid net adds has increased 12% year over year, and was an all-time Q3 record for the streaming giant. For this quarter, average streaming paid memberships and average revenue per user grew 22% and 9% respectively, year over year.
Q2’19 saw a forecast for global net paid adds which was much higher than the actual, where the forecast was 5.0m and the actual was 2.7m. This recovery in Q3 will come as a relief to some, as the dip in subscribers seen in the last quarter was feared to be the start of a new pattern while streaming competition loomed.
The last time Netflix came this close in accuracy with its guidance forecast for global net paid adds was in Q3’17, where the forecast was 5.0m and the actual was 4.6m. Notably, this forecast was repeated in Q2’19 almost two years later, and raised for Q3, where it has fortunately met expectations.
The earnings results have been hotly anticipated from an investor standpoint, particularly as it will be the last report without competition from new streaming services such as Disney+, Apple TV+ and HBO Max.
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