BENGALURU (Reuters) – Netflix Inc hooked 7 million new streaming subscribers from July to September, a third more than Wall Street had expected, reassuring investors who had worried the company was facing a slowdown in its fast-paced growth.
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The record number of additions in the third quarter brought Netflix’s customer base to 137 million worldwide, confirming its rank as by far the world’s biggest online subscription video service.
Netflix shares, already up about 78 percent so far this year, jumped 14 percent to $394.25 in after-hours trading, and boosted other high-tech stocks.
The leap in subscribers marked a sharp turnaround from three months ago, when investors sent Netflix shares tumbling 14 percent after it missed Wall Street’s subscriber growth targets.
Netflix’s results sent shares of Alphabet Inc, Facebook Inc and Amazon.com Inc up about 1 percent higher in extended trade. The four make up the so-called FANG group of high-growth companies that in recent months has lost some of its momentum following market-leading gains in recent years.
Netflix is investing more than $8 billion in entertainment programming this year to lure new customers around the world. In the third quarter, it released its largest slate of original TV shows and movies to date, including new seasons of hits such as “Orange is the New Black” and “BoJack Horseman.”
That paid off in terms of new subscribers. Wall Street analysts had expected Netflix to add about 5.2 million streaming customers in the quarter.
Netflix’s net income rose to $402.8 million, or 89 cents per share, in the third quarter ended Sept. 30, up from $129.6 million, or 29 cents per share, a year earlier. That beat analysts’ average estimate of 68 cents, according to Refinitiv.
Total revenue rose to $4 billion, in line with analysts’ expectations, from $2.98 billion a year earlier.