Q2 2016 – Netflix Earnings Call Summary

Netflix

Below are my key takeaways from the Netflix Q2 2016 Earnings Call on July 18:

Summary:

Total revenue in the quarter was $2,105MM.  US streaming represented 57% of that total, down from 62% YoY, to $1,208MM.  International streaming revenue was $758MM, compared to $455MM last year.  And Domestic DVD was $139MM, down 15% from Q2 2015.

83MM total members worldwide, growing by 1.7MM, which was below the forecast of 2.5MM.  Attributed to an uptick in churn from the un-grandfathering of tenured members to a higher monthly price point.

Launched the 4th season of Orange is the New Black and the 2nd Adam Sandler film, The Do Over, which, upon launch, was the #1 most-watched film on Netflix in every territory.  Expected to have over 600 hours of new content in 2016.

17 original series, docs, films and comedy specials received 54 Primetime Emmy nominations (up from 34 last year), making them the 3rd most nominated network (behind FX and HBO).  9 kid’s shows received 33 Daytime Emmy nominations, more than any network.

Key Financial Metrics:

  • Total Revenue: $2,105MM
    • US Streaming: $1,208MM
    • International Streaming: $758MM
    • US DVD: $139MM
  • Total Contribution Profit: $416MM
    • US Streaming: $414MM
    • International Streaming: -$69MM
    • US DVD: $71MM
  • Total Operating Income: $70MM
  • Total Net Income: $41MM

US Streaming Subs:

  • Total: 47.13MM / Paid: 46.00MM
  • Net Additions: +0.16MM
    • Q1 2016: +2.23MM
    • Q2 2015: +0.90MM

International Streaming Subs:

  • Total: 36.05MM  / Paid: 33.89MM
  • Net Additions: +1.52MM
    • Q1 2016: +4.51MM
    • Q2 2015: +2.37MM

US DVD Subs:

  • Total: 4.5MM / Paid: 4.4MM
  • Net Additions: -0.21MM
    • Q1 2016: -0.16MM
    • Q2 2015: -0.25MM

Forward Thinking:

Links to Company Website:

Please comment below if there are data points from Netflix you’d like me to include in their next Earnings Call Summary.

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