During the this quarter, Netflix grew to $5.2 billion in revenue, up 31% over the prior year, and operating income doubled to $1.0 billion. Paid net adds totaled 6.8m compared to its 7.0m forecast and prior year Q3 of 6.1m.
The company added 517,000 paying customers in the US and 6.255 million international clients in the quarter. The US additions came in below management expectations of 800,000. The board attributed this to a slightly higher than normal churn after the price increase of last year. The second figure was slightly better than the expected 6.20 million.
For Q4, Netflix expects consolidated revenue to increase 30% year over year with 9% streaming ARPU growth. The company forecasts 7.6m global paid net adds (vs. 8.8m last Q4), with 0.6m in the US and 7.0m for the international segment. This implies full year 2019 paid net adds of 26.7m, down from 28.6m last year.
The fourth quarter is a different story, when more competitors including Apple TV+ and Disney+ are entering the market. Netflix projected 7.6 million additions in the fourth quarter, far shy of the 9.6 million Wall Street analysts were expecting, and less than the 8.8 million that Netflix reported in the fourth quarter of 2018. The company also said that it no longer expects subscriber growth to increase for the full year from the 2018 total, in part due to increased competition.
“While we had previously expected 2019 paid net adds to be up year-over-year, our current forecast reflects several factors including less precision in our ability to forecast the impact of our Q4 content slate, which consists of several new big IP launches (as opposed to returning seasons), the minor elevated churn in response to some price changes, and new forthcoming competition,” Netflix executives said in a letter to investors.
