Spearheaded by Stranger Things and Narcos, Netflix posted impressive third quarter results today with a strong user growth and a record increase in revenue.
Netflix raked in a record $2.15 billion in revenue, marking a whopping increase of 36 percent compared with last year. The company also welcomed 3.6 million new subscribers, trumping the 2.3 million it previously estimated.
It saw a better-than-expected performance overall and it attributed the success to the break-out hits from its original content trove, namely the highly acclaimed Stranger Things and the second season of Narcos.
Following the great news, Netflix stock jumped nearly 20 percent in after-hours trading.
"Our over-performance against forecast (86.7m total streaming members vs. forecast of 85.5m) was driven primarily by stronger than expected [customer] acquisition due to excitement around Netflix original content," Netflix explains [PDF].
The company goes on to point out the great success Stranger Things achieved since its release on July 15.
"This nostalgic, supernatural thriller proved to be the blockbuster of the summer and is the kind of broad appeal, cross demographic, and cross border sensation that we hope will distinguish Netflix original content," adds Netflix. "Stranger Things is also notable as it is produced and owned by Netflix, which provides us with more attractive economics and greater business and creative control."
This marks a return to glory for Netflix, after seeing a drop last quarter. Netflix was among the strongest stocks of last year, but its momentum significantly slowed down and the company saw worse-than-expected subscriber growth in the second quarter.
At the time, Netflix said that slow subscriber growth could be attributed to older members leaving its service. The company has since been aggressively expanding to more territories worldwide in a bid to counter subscriber saturation and reached 130 new countries back in January. On the other hand, the international expansion may have helped boost its user base, but may not be profitable for a few years.
At the same time, Netflix's strong push to add more quality original content may be paying out in some respects, attracting more users and generating more hype, but the company's collection of popular movies and TV shows has been affected as a result.
It remains to be seen how Netflix will perform in future quarters, but its third quarter performance is definitely promising. The company will expand its original content lineup and fill half of its library with originals and, if recent rumbles turn out to be accurate, Netflix offline viewing may finally become available soon.
In the meantime, we're looking forward to the second season of Stranger Things, which has been officially confirmed.
