Netflix rebounded from one of its worst quarters in years, posting better-than-expected subscriber growth and revenue in the third quarter Monday.
The streaming giant added 370,000 subscribers in the U.S. and 3.57 million globally. Netflix had expected to add 300,000 net U.S. subscribers and about 2.3 million globally. Netflix now has 86.7 members around the world, versus expectations of 85.5 million.
Netflix stock is up close to 20 percent in after hours trading following the strong earnings report.
Netflix also posted $0.12 earnings per share — versus Wall Street expectations of $0.06 per share — on $2.29 billion in revenue, up 36 percent over this time last year. Wall Street expected the Netflix to report $2.28 billion in revenue.
In its letter to investors, Netflix gives credit for the successful quarter to the hit debut of Stranger Things and the second season of Narcos.
Netflix says it will continue to invest in original content, and the company has a budget of $6 billion toward that end next year.
In the fourth quarter, the company expects 5.2 million new subscribers worldwide, and 1.45 million of them are expected to come from the U.S.
Netflix is working to fend off challenges for streaming supremacy from Amazon, which has upped its streaming game in that department. In April, Amazon announced it would offer a standalone subscription to its Amazon Video streaming content. Amazon prices the service at $8.99, $1 less than Netflix’s monthly charge.
Both Netflix and Amazon are spending big on original content, even challenging some TV networks.
In its letter, Netflix acknowledged Amazon’s effort to compete with Netflix, grow and add new original content.
“We presume that Amazon Prime Video will become as global as YouTube and Netflix this fall with the launch of the Jeremy Clarkson show. Our challenge is to continue to improve our service and content so that we better meet consumer desires. Total screen time is quite large and growing as technology and content improve globally.”
