Netflix revenue climbs to $1.34B, company reaches 50M subscriber mark globally

Netflix's (NASDAQ: NFLX) overall revenues surged around 25 percent year over year to $1.34 billion in the second quarter, and the company's profits more than doubled during that period, from $29 million to $71 million. 

The provider also saw its U.S. subscriber base grow by 570,000 to 36 million between the first and second quarters.

Internationally, Netflix's subscribers grew 78 percent year-over-year to 13.8 million. With planned launches into six more EU countries in September, the company expects that number to jump again in the second half of the year. Netflix currently operates in 40 countries worldwide and has over 50 million subscribers.

Netflix said its revenue is growing faster than its marketing and content spending, showing a 27.1 percent margin. But its total cost of revenues for Q2 was $914.8 million, with $120.7 million going into marketing.

The service is also trying out some new marketing ideas, including gift cards, which will be available later this year, and it is adding its app to smart TVs that use Google's Android platform.

In a letter to shareholders, CEO Reed Hastings and CFO David Wells credited the company's strong lineup of original content for its U.S. growth.

"Our U.S. member base grew to more than 36 million on the strength of our ever-improving content offering, including Orange is the New Black Season 2," according to the shareholder letter. Hastings and Wells also noted the SVOD provider's recent 31 Emmy nominations, and its current and upcoming series including recently released Hemlock Grove and the anticipated Chelsea Handler talk show slated for early 2016.

Netflix's price rise in May had minimal effect on the company's earnings, the letter continued.

"Our two screen HD plan continues to be the most popular plan choice for new members. We expect ARPU to rise slowly as members at the new prices grow as a percentage of total membership."

Netflix's gift card program will roll out in the U.S., Canada, Mexico and Germany later this year, presumably in time for the holiday shopping season. "In mature markets, gift cards will extend our brand presence and make it easier to access Netflix," the letter said. "In newer markets, gift cards help build the brand and provide an easier alternative for consumers to join Netflix in markets with developing online payments."

The company also said it will offer its app on Android TVs from manufacturers including Sony, Sharp and others.

For more:
CNET has this story
- see this release (PDF)
- see the shareholder letter (PDF)

Earnings summary: Sizing up pay TV earnings for the second quarter of 2014

Related articles:
Level 3: Verizon is slowing Netflix to extract money from us
YouTube's value to advertisers touted by Google execs
Netflix to raise subscription prices by up to $2, adds 2.25M U.S. subs in Q1

Suggested Articles

In its continuing quest to be available on every display in and around the house, Dish Network virtual MVPD Sling TV just launched on Google Nest Hub.

Effectv is launching Mnemonic, a full-service creative agency and a self-service creative portal through Effectv Ad Planner.

Kevin Mayer, chairman of Disney’s direct-to-consumer and international business, this week further explained the troubles.