Netflix has announced earnings for the fourth quarter and full-year of 2014, beating Wall Street expectations. The numbers were bolstered by a faster than expected growing global user base, with international expansion playing a large part of Netflix's successful strategy.
Fourth-quarter earnings of $0.72 per share on revenues of $1.48 billion were reported, compared to analyst earnings forecasts of $0.45 per share on revenue of $1.48 billion. Revenues rose from $1.18 billion a year ago, while EPS climbed $0.29. For fiscal 2014, Netflix reported earnings of $4.32 per share on revenues of $5.55 billion, compared to $1.85 per share in earnings and revenues of $4.4 billion in fiscal 2013.
The company saw soaring subscriber growth, adding 4.33 million new users in the fourth quarter alone, beating its forecast of 4 million, whilst bringing the total number of subscribers to 57.4 million worldwide. This is despite a drop in added US streaming subscribers, which was down from 2.3 million in the year-earlier period to 1.9 million.
"Our international expansion strategy over the last few years has been to expand as fast as we can while staying profitable on a global basis. Progress has been so strong that we now believe we can complete our global expansion over the next two years, while staying profitable, which is earlier than we expected. We then intend to generate material global profits from 2017 onwards," the company said.
Already available in 50 countries, Netflix disclosed in a letter to shareholders that it plans to expand to 200 countries by 2017, whilst staying profitable. It will expand to Australia and New Zealand at the end of this quarter. It is still exploring options for entering China.
The streaming service's shares rose as a result of the strong earnings and streaming-subscriber additions, going up as much as 16 per cent in after-hours trading.
The Interview, as part of the package
Netflix announced that it will join other platforms and start streaming Sony's The Interview from this Saturday, 24th Jan. The film will be available to subscribers at no extra cost, whilst services like Google Play, iTunes, YouTube and Xbox Video are charging viewers $14.99 to buy or $5.99 to rent.
Sony has announced that the film has grossed over $40 million through rental or purchase online, and a 'Freedom Edition' DVD and Blu-Ray will be on sale starting 17 Feb.