Netflix Reports Q2 Earnings; $889 Million in Revenue, $6 Million in Profit

Netflix reported its earnings for the second quarter of 2012, with revenue of $889 million, up around 2% year-over-year, and a net profit of around $6 million, better than a net loss of around $4 million last year. It now has over $800 million in cash and short term instruments.

Netflix now has around 24 million domestic streaming subscribers, and is continuing to expand internationally into new markets like Canada, Latin America, UK and Ireland. It now has a total of 3.6 million international streaming subscribers, and 9.1 million DVD subscribers. DVDs continue to shrink as a part of its overall business.

Reed Hastings, Netflix CEO, mentioned this in his shareholder letter:

“In Q2, we achieved financial performance in the top half of our guidance in nearly every metric, and have returned to profitability.

66 months ago, we launched Netflix streaming in the US with limited selection. Now, we have 24 million domestic streaming members and an incredible selection of TV shows and movies. Networks that license us prior season TV shows are in several cases benefiting from record audience numbers in the current season, partly due to the availability and promotion of prior seasons on Netflix. We are growing our business, and helping to grow the entire industry.

This growth in each of our [new international] markets reflects our investment in an easy-to-use personalized selection experience, ever more compelling content, and higher quality streaming delivery. Device by device, title by title, network by network, market by market, we are constantly improving our service.

Q3 has begun strongly for us, and we expect to be profitable again in Q3.

In Q4, we will launch our next international market, which will drive us temporarily back into the red.

We have enormous challenges ahead, and no doubt will have further ups and downs as we pioneer Internet television. We are making progress in every market we serve, and see a once-in-a-generation opportunity ahead to build the world’s most popular TV show and movie service.”

via Netflix – SEC

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