"Our international segment now accounts for 50.1% of our total membership base. International revenue rose 57% year over year, excluding a -$23 million impact from foreign exchange, while international ASP grew 10% year over year on a F/X neutral basis. International contribution profit of -$13 million vs. -$69 million was better than our -$28 million forecast due primarily to higher-than-forecasted paid members."
"Were forecasting Q317 international net adds of 3.65 million. We are making good progress with our international expansion as improving profitability in our earlier international markets helps fund significant investment in our newer territories. As a result, we expectpositive international contribution profit for the full year 2017 , at current F/X exchange rates. This would mark the first ever annual contribution profit from our international segment."
There are a couple of points investors need to focus on going forward, based on the above management comments.
First and foremost, content drives subscriber growth and almost daily you hear about the amount of money being spent by the company on content. Yes, a huge content spend does mean the company has to tap the equity and debt markets more often than most, but the results are proving the wisdom of that strategy.
Secondly, the surveys talking about less than expected growth here, there and everywhere put out by the sell-siders, the darksiders and "market research" companies are almost useless. They are pretty much a waste of paper, although it does scare many shareholders into selling their shares prematurely. The sell-siders put out that nonsense because almost always they are trying to justify their negativity on the company and the dark side does it for obvious reasons. They want the stock to go down. Period.
Thirdly, this set of outstanding numbers from Netflix will more than likely roll over into the other SVOD providers as well like Amazon, Apple, Google, et al. You heard it here first. Try to ignore the rampant negativity that's been ongoing for years in techland.
Finally, be even more vigilant today because the negativity will pick up even more steam given how well the shares have reacted in premarket trading.
Incidentally, my OTM calls purchased just yesterday are now ATM more than likely depending on how the underlying performs during the regular trading day.
(Long nflx, aapl, amzn, googl, long and short options in all)