The streaming powerhouse Netflix has cleared more than 100 million subscribers and counts more of its customers abroad than in the United States, the company announced Monday in a better-than-expected earnings report.
Netflix added more than 5 million new subscribers in the second quarter, beating its forecast for both domestic and international customers. Netflix had projected this year that it would add 600,000 new subscribers in the United States and another 2.6 million international customers. Wall Street analysts expected similar figures.
The company said its membership grew more than anticipated because of its programming offerings, which included new seasons of "Orange is the New Black" and "House of Cards."
In after-hours trading, the company's stock price climbed as high as $179.20, or more than 10 percent.
Netflix said in a letter to shareholders that the competition for audiences' attention is "intense," but the company described the streaming ecosystem — filled with major players such as HBO, Hulu, Amazon and YouTube — as complementary, rather than winner-take-all.
"We are all co-pioneers of internet TV and, together, we are replacing linear TV," Netflix said. "The shift from linear TV to on-demand viewing is so big and there is so much leisure time, many internet TV services will be successful."
Netflix said it added 1.07 million customers domestically and 4.14 million abroad for the second quarter. The majority of Netflix's subscriber base, 50.1 percent, is found outside the United States, the company said. The Internet TV service is offered in more than 190 countries and in 27 languages.
The company also said that it took in $2.8 billion in total revenue in the second quarter, up by more than 30 percent from the same period last year, and it projects about $3 billion next quarter, another 30 percent jump from 2016 and its highest-ever revenue goal.
Kevin Landis, chief executive of Firsthand Funds, an investment firm, told CNBC Monday that there are few companies positioned as well as Netflix to take advantage of the shift away from pricier cable-TV packages and toward on-demand streaming. Netflix’s quarterly report, he said, reflects the company’s relentlessness to amass more and more subscribers. “This is a snowball that just keeps rolling.”
But Netflix’s efforts to attract new users through unique programming has come at a cost. The company said it will continue to allocate increased capital toward content, especially for its original TV shows and movies. And as streaming competitors continue to invest in their own in-house offerings, jostling for the attention of viewers, the cost of producing programming could ultimately increase for Netflix, Doug Mitchelson, a UBS analyst, said in a note to clients last week. “Over the near-to-mid term, we do not expect competition to directly impact Netflix’s subscriber growth, though we remain wary that competition could drive content costs higher longer-term.”
For Netflix, its rising revenue and subscriber numbers are a sign that pouring money into original programming is paying off. The company said it expects to see positive momentum carry into next quarter, but added that it had learned not to overshoot its expectations as it had done in previous quarters. Netflix said, however, that it can continue to expand its subscriber base, especially overseas, where it said it will continue to make significant investments in newer markets.
By the end of the year the company plans to spend $6 billion on original programming and will dole out $1 billion to market its library of content. On top of pulling in new customers, the streaming service received 91 nominations for this year's Emmy Awards, second only to HBO, which received 111, and well ahead of Hulu's 18 and Amazon's 16, according to Business Insider. Netflix's sci-fi hit "Stranger Things" tied for the second-most nominated show, pulling in 18.