Netflix blew past its own estimates for paid membership additions during the first quarter by pulling in 9.6 million new paid subscribers, well ahead of the 8.9 million it was expecting.
The company added 1.74 million new paid subscribers in the U.S. and 7.86 million internationally, up 16% year over year. The company said it was a quarterly record for subscriber growth, but looking ahead it’s anticipating a slight slowdown. For the second quarter, Netflix is projecting total paid net adds of 5 million (300,000 in the U.S. and 4.7 million internationally), down 8% year over year.
If Netflix hits this mark, it would put the company at 14.6 million paid net adds for the first half of 2019. As of now, Netflix has nearly 149 million paid subscribers.
Netflix’s first-quarter revenues totaled $4.52 billion, up more than 22% year over year. The figure beat Wall Street estimates by $20 million. The company’s diluted EPS of $0.76 beat estimates by $0.19. The company posted operating income totaling $459 million and net income totaling $344 million.
Netflix is expecting revenues and operating income to grow next quarter but did acknowledge that a wave of price increases across the U.S., Brazil, Mexico and parts of Europe could potentially impact some aspects of the business. The company said the response in the U.S. so far is similar to what it saw in Canada last year, where gross additions were not affected but some short-term churn kicked in.
As expected, Netflix also acknowledged Apple TV+ and Disney+, two new streaming services launching this year that to some pose a slight risk to Netflix’s business.
“We don’t anticipate that these new entrants will materially affect our growth because the transition from linear to on demand entertainment is so massive and because of the differing nature of our content offerings,” wrote Netflix in a letter to shareholders.