Netflix (NFLX) - Get Netflix, Inc. (NFLX) Report reported better-than-expected third quarter earnings Tuesday, and added 4.4 million subscribers to its streaming service, thanks in part to hit shows such as Money Heist, Squid Game and Sex Education.
Netflix reported earnings of $1.44 billion or $3.19 a share, well ahead of the Street consensus forecast of $2.56 a share and up 83% from last year. For the three months ended in September, Netflix said revenue rose 16% from last year to $7.5 billion, largely in line with analysts' estimates.
Overall subscriptions more than doubled over the quarter, compared to Netflix's own forecast of 3.5 million, to a fresh record high of 4.4 million taking its total to 214 million. Walt Disney's (DIS) - Get Walt Disney Company Report Disney+ streaming service, added 12.4 million new subscribers over the three months ending in June, taking its total to 116 million.
Looking into the final three months of the year, Netflix said it hopes to add 8.5 million new subscribers and generate around $7.71 billion in revenues. Higher costs will trim earnings down to around 80 cents a share, the company suggested.
"We're are seeing the positive effects of a stronger slate in the second half of the year," the company said in a note to shareholders. "Season five of La Casa de Papel (aka Money Heist) and season three of Sex Education were two of our biggest returning shows in the quarter."
The group will host a conference call of its third quarter results Tuesday at 6 p.m. Eastern time.
Netflix shares were marked 0.44% higher in after-hours trading immediately following the earnings release, indicating a Wednesday opening bell price of $641.83 a share. Netflix stock has risen 22% this year to close at $639.
Netflix said Money Heist and Sex Education were watched by 69 million and 55 million households respectively in the first four weeks of their release.
Netflix told investors Tuesday that Squid Game "is its biggest TV show ever" and clocked a viewership of 142 million households in the first four weeks since it began streaming.
The success of its Korean hit show "Squid Game" could bring in nearly $900 million for Netflix, more than 40 times its cost of production, Bloomberg News reported last weekend. Netflix stock has risen 7.1% since the show started streaming on Sept. 17.
The figure makes the dystopian series one of the most profitable for the company, according to internal documents seen by Bloomberg News. More than 130 million users have streamed the South Korean show for at least two minutes, the report added.
"For the second consecutive quarter, the APAC region was our largest contributor to membership growth with 2.2 million paid net adds," said Netflix.
Netflix bought videogame creator Night School Studio in September and launched five mobile gaming titles in select European markets.
"We’ve begun testing our games offering in select countries. It remains very early days for this initiative and, like other content categories we’ve expanded into, we plan to try different types of games, learn from our members and improve our game library," the company added.
Netflix said the games will be included as part of a Netflix membership with no ads and no in-app purchases.
Hastings had spoken about a push toward gaming during the second quarter earnings call in July. "Video gaming, we're pushing on that, and that will be part of our service. So, think of that as making the core service better. So, lots of investment but not a separate profit pool. It's enhancing the big service that we have," Hastings said in July.
Meanwhile, Bridgerton a period drama from producer Shonda Rhimes was watched by 82 million, the company said in January.