Industry analysis
Netflix’s position in 2018
According to a report released by Nielsen in November 2017, in the second quarter of
2017, 59% of American households had access to at least one subscription video service, almost
certainly Netflix or Amazon. While Netflix is famously private about their ratings, they
announced in 2018 that they have over 110 million subscribers worldwide. Things were certainly
looking up for Netflix, who announced in their Q4 earnings that the company achieved a full-
year positive international contribution profit for the first time, and held a market cap of over
$100 billion.
However, Netflix released Q2 earnings for 2018 revealing subscriber growth far smaller
than what was expected. While StreetAccount expected domestic growth of 1.23 million new
subscribers and international growth of 5.11 million new subscribers, Netflix only saw 670,000
new domestic subscribers and 4.5 million new international subscribers in the last quarter.
Netflix stock fell as much as 15% to $342 during extended trading.
Expected growth Actual Growth
Domestic 1.23 0.67
International 5.11 4.5
0
1
2
3
4
5
6
$ MILLIONS
NETFLIX GROWTH Q1‘2018 – Q2‘2018
However Netflix revenue and Net income for FY 2015 to FY 2017 are being presented
below.
FY 2015 FY 2016 FY 2017
0
2
4
6
8
10
12
14
$ Billions
Revenue Vs Net Income
