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Netflix Adds 5.3 Million Subs in Q3, Beating Forecasts

Netflix kept the streaming train going full-tilt in the third quarter of 2017, adding more subscribers in both the U.S. and abroad than expected.

The company gained 850,000 streaming subs in the U.S. and 4.45 million overseas in the period. Analysts had estimated Netflix to add 784,000 net subscribers in the U.S. and 3.62 million internationally for Q3.

“We added a Q3-record 5.3 million memberships globally (up 49% year-over-year) as we continued to
benefit from strong appetite for our original series and films, as well as the adoption of internet
entertainment across the world,” the company said in announcing the results, noting that it had under-forecast both U.S. and international subscriber growth.

Netflix posted revenue of $2.98 billion and earnings per share of 29 cents for the period. Wall Street had expected Netflix to report Q3 revenue of $2.97 billion and EPS of 32 cents.

Note that the results do not include the effects of Netflix’s price increases in the U.S. and other territories, which took effect for new subs in early October and will roll out to existing members through the fourth quarter.

Netflix “may well be conservative” with its Q4 streaming-subscriber forecast for the U.S., given the pending price increases, RBC Capital Markets analyst Mark Mahaney wrote in a research note prior to Netflix releasing the Q3 results.

In August, Disney announced it was not renewing the movie-output deal with Netflix for first-run Disney and Pixar titles in the U.S. — to launch its own Netflix-style streaming service starting with 2019 releases. Disney chief Bob Iger said last month the company would also not license Marvel or Lucasfilm movies either. Disney’s move initially rattled investors, but Netflix stock since climbed to all-time highs.

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