Netflix shares soar after record growth

Credit Netflix

Credit Netflix

The number of both United States and worldwide subscribers grew at a clip over the month, with Netflix adding 1.09 million new subscribers in the USA and 5.87 million internationally.

Netflix is among the first of the major United States tech firms to report earnings.

Earnings jumped to 89 cents per share, well above a projected 68 cents.

The streaming superpower, which hit its $4bn (£3.03bn) revenue estimate, was under pressure to up subscriber growth after falling short of expectations in the previous quarter.

Netflix faces increased competition from traditional media companies and giants such as Amazon and its costs have been growing as it spends more on its own material.

It has been borrowing heavily to fund its rapid growth, issuing $7.5bn of bonds in less than three years - a strategy that could become more costly in a rising interest environment.

"In addition to our commercial success, we're ecstatic when the creators we work with are recognised for their inspiring work".

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Netflix is behind shows such as The Crown and Orange Is The New Black.

The firm has said it plans to spend as much as $8bn on content this year, with more than a quarter devoted to original programming.

Netflix shares soared after smashing growth and revenue targets, despite the company nearly doubling its debt in order to invest in original series. Its global business added almost 5.9 million subscribers, compared with the average analyst estimate of 4.5 million.

Netflix added 1.1 million subscribers in its domestic market, above the 674,000 additions forecast.

Netflix's net income rose to $402.8 million, or 89 cents per share, in the third quarter ended September 30, up from $129.6 million, or 29 cents per share, a year earlier.

Netflix seems to have found its long-form goldmine: The streaming service disclosed as part of its Q3 earnings report Tuesday that more than 80 million of its subscribers from around the world watched one of its "Summer of Love" rom-coms over the past few months.

CEO Reed Hastings told investors, in a letter, that the company expects to add 7.6 million paid subscribers in its fourth quarter, though its operating margin would tighten because of the higher mix of films at year's end. Disney and AT&T Inc, the parent of Warner Bros. and HBO, are each looking to introduce new services next year - after completing takeovers of other companies worth a combined $160 billion.

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