Netflix is Now in Crazy Land as it Rockets Past $100 a Share

After market close Wednesday, Netflix (NFLX) reported its fiscal Q1 2010 results. Here are the highlights:

  • Revenue was $494 million, compared with the consensus estimate of $493 million.
  • Netflix ended the quarter with 13.97 million subscribers, compared with 12.27 million subs at the end of Q4.
  • EPS was $0.59, compared with the consensus estimate of $0.54.
  • The company’s Q1 guidance was for revenue of $490 – 496 million, ending subs of 13.5 – 13.8 million, and EPS of $0.47 – 0.58.
  • The company raised its 2010 guidance for revenue to $2.11 – 2.16 billion from $2.05 – 2.11 billion, ending subs to 16.5 – 17.3 million from 15.5 – 16.3 million, and for EPS to $2.41 – 2.63 from $2.28 – 2.50. Initial Q2 guidance is for revenue of $517 – 525 million, ending subs of 14.7 – 15.0 million, and EPS of $0.62 – 0.73.
  • Gross profit for the quarter was $187 million.
  • Gross margin for the quarter was 37.8%, versus 34.2% last year.
  • SG&A expenses totaled $130 million.
  • Operating income totaled $58 million.
  • GAAP net income totaled $32 million.
  • Gross subscriber additions were 3.49 million.
  • Net subscribers added were 1.70 million.
  • Gross subscribers lost were 1.79 million.
  • Churn rate was 3.79% and gross SAC was $21.54 (both all time lows), compared to churn of 4.22% and SAC of $25.79 in the same quarter last year.
  • During Q1, the company spent $108 million (1.67 million shares at ≈ $65/share) on share repurchases from its share buyback program. The company plans to continue its share buyback indefinitely.
  • The company noted that 55% of its subscribers streamed a movie or TV episode in Q1:10, compared with 48% in Q4:09.

(Source: WedBush Morgan)

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