Netflix reported a 36% increase in streaming revenue in 2017 (up to just over $11.6 billion) and 24 million new memberships, bringing the total number of members to 117.5 million across 190 countries.
In a letter to shareholders the company said that it had a “beautiful” fourth quarter, reporting revenue of $3.286 billion in the final quarter of 2018 (up from $2.478 billion in Q4 2016) and operating income of $245 million (compared to $154 million in the prior year´s last quarter).
US memberships rose by 2.0 million in Q4 (beating its forecast of 1.25m) bringing total FY17 net adds to 5.3 million, while internationally Netflix added 6.36 million memberships (versus its forecast of 5.05 million).
Netflix’s international segment delivered its first full year of positive contribution profit of $227 million (4.5% contribution margin).
Operating income in Q417 rose to $245 million (7.5% margin) compared to $154 million in the previous year (6.2% margin) and beat the company’s initial forecast of $238 million.
The streaming giant noted that it took a $39 million non-cash charge in Q4 for “unreleased content” that it decided not to move forward with.
“This charge was recognized in content expense in cost of revenues. Despite this unexpected expense, we slightly exceeded our contribution profit and operating income forecast due to our stronger than expected member growth and the timing of international content spend,” the company said.
Netflix forecasts that it will add a total of 6.35 million memberships, of which 1.45 million will be in the US and 4.9 million internationally.
“We believe our big investments in content are paying off,” Netflix said in its letter to shareholders. “In 2017, average streaming hours per membership grew by 9% year-over-year. With greater than expected member growth (resulting in more revenue), we now plan to spend $7.5-$8 billion on content in 2018.”