Netflix tops analysts' estimates with 7.1 million new customers

A shot from the popular Netflix show The Crown. Picture / supplied.

Netflix signed up a record 7.05 million new customers in the fourth quarter, topping analysts' estimates for domestic and international growth to cap the company's first year as a global online TV service.

The company added 5.12m new customers in international markets, according to a statement Wednesday, beating analysts' estimates of 3.78m. Los Gatos, California-based Netflix also signed 1.93 million new domestic customers, exceeding projections of 1.38m. The shares jumped in late trading.

The popularity of the period drama "The Crown," about a young Queen Elizabeth II, and new seasons of "Gilmore Girls" and "Black Mirror" helped Netflix lift its total online customer base to almost 94m. Since expanding to 130 new countries last January, Netflix has delivered strong international gains and could see foreign subscribers exceed its U.S. base this year.

• Fourth-quarter sales rose 36 per cent to US$2.47 billion ($3.5b) from a year earlier, meeting the average of estimates compiled by Bloomberg.

• Earnings grew to 15 cents a share from 10 cents a year ago, beating estimates of 13 cents.

• Netflix predicts it will sign 1.5m new domestic streaming subscribers in the first quarter, while analysts project 1.72 million.

• International subscribers will grow by 3.7m, the company said, compared with analysts' estimates of 3.5m.

First-quarter earnings will be US$165m, or 37 cents a share, a big first installment on founder and Chief Executive Officer Reed Hastings's vow to deliver material profit in 2017. The company, the world's largest paid video service, bet its future on globally replicating its success in the US, where it has almost 50m customers, sacrificing near-term profit while spending heavily on programming and marketing to build a global TV audience.

Hastings still has a long way to go. While Netflix has signed up almost half of the available market at home, it hasn't reached that percentage of broadband households in even its strongest foreign territories, such as the UK and Canada.

Shares of Netflix gained as much as 9.6 per cent to US$146 in extended trading after results were announced. The stock rose 0.3 per cent to US$133.25 at the close in New York after rising 8.2 per cent in 2016.

Netflix tends to credit strong performance to new seasons of original shows. Notable debuts in the period included "The Crown," a reboot of "Gilmore Girls" and the company's first original Brazilian series, "3%." The company also released a new season of the sci-fi "Black Mirror," along with a movie based on President Barack Obama's time in college and a number of stand-up comedy specials.