Netflix Subscriber Surge Helps Triple Profits And Push NFLX Market Cap Over $100 Billion
Netflix is riding a wave of popular shows directly to a boom in subscribers that has had a significant impact on its market capitalization. In the last quarter of 2017, Netflix had 2 million more customers sign up for the steaming service than Wall Street had predicted. The massive subscriber numbers go to show that while Netflix has been around for a long time, it still has room to grow.
The massive bump in subscribers helped the streaming giant to triple profits, giving it more money to use for original programming to lure in even more subscribers. Netflix had announced in October of 2017 that it's content budget for 2018 would be a massive $8 billion. That massive content budget did come with a big caveat for customers in the form of a price increase to $13.99 monthly for the premium plan, which is an increase of $3 per month.
The surprising results at the end of 2017 pushed the Netflix market capitalization to over $100 billion for the first time. Shares jumped 9% to over $248 in after-hours trading Monday. Netflix saw its stock price gain 53% during 2017, and one of the most impressive numbers for Netflix is that it currently boasts half of all U.S. broadband subscribers as subscribers to its streaming service.
In the quarter that spanned October through December, Netflix gained 6.36 million subscribers in international markets. In the U.S., the streaming service gained 1.98 million customers. At the end of the year, streaming subscribers totaled 117.58 million people, up from 109.3 million in October 2017.
"Netflix is pouring more and more money into making content, and it is directly translating into more subscribers," BTIG analyst Richard Greenfield said. "They see a huge opportunity and they are moving as fast as they can to attack it."
Netflix did report that it took a $39 million non-cash charge for "unreleased content we’ve decided not to move forward with." One source claiming to be familiar with the matter says that the massive charge was related to content featuring Kevin Spacey, who Netflix cut all ties with after accusations of sexual misconduct. "House of Cards" production has stopped with reports indicating that the stoppage was to write out Spacey's character. Spacey was was also in a Netflix film about Gore Vidal called "Gore" that now won’t be released.