International revenues currently amount to 25% of Netflix’s revenue and the company says its present international segment is on track to achieve profitability this year.
However, Netflix’s expansion into new European markets (with corresponding investments in content and marketing) in the second half of 2014 will keep its expanded international segment at a net loss. The company is expected to launch in France, Germany and Belgium.
International performance in Q1 was strong. with memberships growing by 1.75 million, bringing the international total to 12.7 million members, with 72% more net additions than prior year Q1.
The US streaming service grew by 2.25 million net members to 35.7 million members. Net additions for Q1 were 0.22 million more than prior year Q1.
Netflix now has a total of 48.4 million members, and there are still 6.7 million DVD-by-mail members in the US. “We are approaching 50 million global members, but that is far short of HBO’s 130 million. We are eager to close the gap,” Reed Hastings (CEO) and David Wells (CFO) said in the report.
International revenues currently amount to 25% of the total streaming revenue and Netflix anticipates its international segment to eventually surpass the US market. International contribution losses shrank by $22 million q/q, with losses more than halved on a y/y basis due to the strong growth in paid members.
Free cash flow in the quarter was $8 million versus net income of $53 million.