Netflix added a record 8.8 million new subscribers during the fourth quarter of 2018, the streaming giant reported on Thursday, while also topping Wall Street earnings estimates.
For the three months ended Dec. 31, Netflix reported earnings per share of 30 cents, compared to analyst estimates of 24 cents EPS. Netflix narrowly missed on analyst expectations for quarterly revenue, bringing in $4.19 billion — a 27 percent year-over-year increase — compared to estimates of $4.21 billion.
Despite its banner quarter, Netflix still fell short of its own subscriber projections, with the company anticipating it would add 9.4 million new subscribers to close 2018. Wall Street was looking for more than 9 million new subscribers as well. Netflix shares fell 4 percent in after-hours trading to $338.72 per share.
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Most of Netflix’s growth came from overseas, with the company adding 7.3 million international paid memberships. Netflix added 1.5 million domestic customers — pushing the company to 60 million overall in the U.S. Netflix now has 139 million paying customers overall.
The company reported $10.36 billion in long-term debt on Thursday afternoon; it added another $700 million in cash during Q4, bringing its total to $3.7 billion in cash on hand.
Netflix brought in $16 billion in annual revenue last year, according to the company’s letter to shareholders, marking a 35 percent year-over-year increase; it also doubled its annual profit to $1.6 billion in 2018.
Netflix, as usual, had a busy end to 2018. The Los Gatos, California-based company, soon after reporting strong third quarter earnings and subscriber growth in October, raised another $2 billion in debt. In its announcement, Netflix said the new funds would go towards content production and acquisition, as well as other “general corporate purposes.”
In a rare step in November, Netflix gave “Roma” an exclusive limited theatrical release, weeks before it hit the streaming service the following month. The film has garnered Oscar buzz and already received plenty of accolades, including a best director win at the Golden Globes for Alfonso Cuaron and being named the best film of 2018 at the Critics’ Choice awards earlier this month.
And while it hasn’t received the same amount of critical acclaim, “Bird Box,” the Sandra Bullock-led flick that debuted in December, has still spurred plenty of conversation. The publicity photo of Bullock donning a blindfold — used to ward off evil spirits from attacking characters in the movie — has become a full-blown meme.
At the same time, the “Bird Box challenge,” where people attempt difficult tasks while blindfolded, has swept Twitter and YouTube, prompting Netflix to essentially beg its viewers to stop mimicking the movie. Netflix, a company that typically protects viewing numbers like they’re government secrets, took a victory lap in the week after the movie’s debut, saying it was watched by 45 million accounts — a Netflix record for a single week.
The company updated that number on Thursday, tweeting that 80 million accounts had now streamed “Bird Box” in the first month of its release.
Ahead of its Q4 earnings, Netflix announced a price hike on Tuesday, pushing its Standard plan from $10.99 to $12.99 and its Premium plan up from $13.99 to $15.99 each month. The increases will hit domestic users, as well as Latin American and Caribbean countries where Netflix bills customers in U.S. dollars, including Barbados, Uruguay and Belize.
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After a swoon following its Q3 earnings, Netflix’s stock has enjoyed a healthy run in the last month, increasing 30 percent before the closing bell on Thursday.
Netflix will hold its usual recorded call to discuss its earnings at 6 p.m. ET on its YouTube investor relations page.
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