Will Netflix's Domestic Subscriber Base Drive Q4 Earnings?
Zacks Investment Research | Jan 18, 2018 10:33PM ET
Netflix’s (NASDAQ:NFLX) domestic streaming business has been a long-term growth driver. We expect its strong subscriber base to drive the segment’s top line. The company is set to report fourth-quarter 2017 results on Jan 22.
Subscriber Base Continues to Grow
Netflix’s domestic subscriber base in the third-quarter totaled 52.8 million, up from 47.5 million in the year-ago quarter. Paid members increased to 51.35 million from 46.48 million in the year-ago period.
The improving subscriber base boosted the top line. Domestic Streaming revenues improved 18.6% from the year-ago quarter to about $1.547 billion.
In the fourth quarter, management expects to see an increase of 1.25 million subscribers in the domestic segment. Moreover, U.S. contribution margin is anticipated to be around 34.4%.
For the fourth quarter, the Zacks Consensus Estimate for domestic subscribers is 54.1 million, up 9.5% from the figure reported in the year-ago quarter. Paid domestic subscribers are expected to increase 9% to more than 52 million from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for domestic segment revenues is projected to be around $1.63 billion, indicating a 15.9% improvement on a year-over-year basis.
Netflix, Inc. Revenue (TTM)
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