Strong growth for Netflix, the expansion plan is working but not enough

Last quarter, Netflix announced an expansion plan into new 130 countries of the world and in recent hours has revealed the results of the new strategy, and if the same has already been able to pay. If in terms of volumes, the answer is definitely yes, in pure monetary terms is not so predictable. To date Netflix has 81.5 million subscribers to the service, with a growth on a quarterly basis that is unmatched for the Hastings society.

Official forecasts were 6.1 million users in more in the first quarter of 2016, but the results went beyond expectations. Netflix makes record 6.74 million new users in the period considered, with a large majority of the new members who do not come from the United States. The service is still growing even in the motherland, with 2.23 million Americans enrolled. Also in this case the data is above expectations, which were of 1.75 million new US users.

The situation will stabilize in the next quarter, when growth will be much more modest: the company expects to add a total of 2.5 million users worldwide, with only 500,000 new registrations from the United States. Investors had expected most optimistic forecasts, although it must be said that the second quarter is historically the least rewarding in terms of growth for the multimedia streaming service.

Despite the strong and unexpected growth in Q1 2016, Netflix has missed expectations in sales: the company has gained sales for 1.96 billion dollars, an increase of $ 0.06 per share. Analysts had expected a little more, with a turnover of at least 1.97 billion dollars. The financial results follow some changes in strategies in the US, where the cost of the service has been increased for several users to $ 10 monthly.

In recent days, Amazon announced Prime Video as a stand-alone service at a slightly lower price, a move that Netflix is ​​still waiting for. As happened in the last weeks it will certainly influence the reactions of investors and market analysts, with Netflix that can be assessed according to its latest strategic moves. Netflix stock value has dropped by about 11% in after-hours trading following the announcement of financial results.