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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

Other Related Articles from Metue
• This Weeks Earnings Watch List
• How Long is the Blu Ray Runway
•By the Numbers: DVD Erosion, Video Games and Smartphones
• Netflix and LG Go Further With Connected TVs
•Netflix and Tivo finally Hook Up
•Blockbuster and Sonic Solutions Hook Up to Compete with Netflix Digital
•Netflix and LG Reveal Streaming Blu Ray Player
•Cracking Release Windows: Studios Embracing “Day and Date”

Further press coverage on Netflix’ finances can be found at:
•Yahoo Finance
•Google Finance
•Marketwatch