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Netflix Q1 Earnings: The Quick Look

Netflix earnings came in Thursday straddling expectations.  Analysts had called for 41 cents a share on revenues of $390m. The company delivered 37 cents on revenue of $394m.  Despite the differences, Netflix first quarter profit was up 68% compared to Q1 of 2008.  Revenue was up 21%.

Weak ad markets and growing consumer appetite for entertainment helped the company deliver impressive subscriber growth and reduced subscriber acquisition costs.   Netflix closed the quarter with 10.31m subscribers, a 25% year over year expansion.  Subscriber acquisition costs were $25.79 per subscriber compared to $29.48 last year and $26.67 in Q4 2008.

Gross margin for Q1 was 34.2% compared to 31.7% in Q1 2008, and 35.2% in Q4 2008.  Free cash flow for the first quarter came in at $15.1 compared to $4.8m for the same period a year ago.

Netflix believes it will continue to expand as the greater DVD market seems to be shrinking.  For the next quarter, the company is forecasting earnings of 44c to 53cents a share on revenue of $403 to $409m.   The subscriber count is estimated to be between 10.4m and 10.6m.

For the full year ahead, the company sees more growth.  Netflix is now anticipating a 500k surge in subscribers beyond prior guidance.

Prior Metue Coverage of Netflix Earnings
Netflix Q4 2008 Earnings
Netflix Q3 2008 Earnings
Netflix Resets Earnings Expectations
Netflix Q2 ‘08 Earnings: Better than Expectations
Netflix Q1 ’08 Earnings: Short Term Sell? Long Term Buy?
Netflix Q4 ’07 Earnings

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This Weeks Earnings Watch List
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By the Numbers: DVD Erosion, Video Games and Smartphones
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Further press coverage on Netflix’ finances can be found at:
Yahoo Finance
Google Finance

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