Aided heavily by international subscriber additions, Netflix said it added 7.41 million streaming subs worldwide in Q1, handily beating the 6.35 million it expected to add.
The Q1 totals, which included 1.96 million U.S. streaming sub additions and 5.46 million from its international offerings, extended Netflix’s global streaming base to about 125 million. Netflix had expected to add 1.45 million U.S. streaming subs, and 4.9 million international subs.
Netflix shares were up $20.23 (6.57%) to $328.01 each in after-hours trading Monday.
In its letter to shareholders, Netflix said it expects to end Q2 with 131.2 million subs worldwide by adding 6.2 million more (1.20 million U.S., 5 million from international operations).
Q1 revenue was $3.7 billion, up 40.4% year-over-year, with net income of $290 million (64 cents per diluted share). Netflix said revenue growth in Q1 marked the fastest pace in the history of its streaming business, driven by a 25% boost in average paid streaming memberships.
Netflix expects Q2 revenues of $3.93 billion and net income of $358 million (79 cents per diluted share).
The company noted that it will have 2018 content expenses in the range of $7.5 billion to $8 billion across formats (series, films, unscripted shows, documentaries, comedy specials and non-English language content).
Netflix said it will remain primary a direct-to-consumer business, but views bundling with MVPDs, wireless service providers and other partners “as an attractive supplemental channel.”
“These relationships allow our partners to attract more customers and to upsell existing subscribers to higher ARPU packages, while we benefit from more reach, awareness and often, less friction in the signup and payment process,” Netflix said. “We believe that the lower churn in these bundles offsets the lower Netflix ASP.”
Netflix also announced that Ambassador Susan Rice, a former National Security Advisor and U.S. ambassador to the United Nations, has joined its board of directors. Netflix, which operates in more than 190 countries, her expertise in international affairs will be valuable.