Internet streaming company now counts 40 million subscribers worldwide and 31.1 million in the United States.
Investments in original programming such as House of Cards and Orange is the New Black gave Netflix a record quarter, earning the company $32 million on revenue of $1.1 billion — four times the profit of $7.7 million it made this time last year.
Netflix reported it had 31.1 million U.S. based users during the July to September quarter, an increase of 1.3 million from the previous quarter and pushing its subscriber count over premium cable channel HBO which has an estimated 28.7 million domestic subscribers.
Netflix’s stock rose by 10 percent to $391.47 during after-hours trading on the NASDAQ. While that might be good news for most executives, it worries Netflix CEO Reed Hastings as his company’s stock has a history of volatility.
A year after Netflix’s IPO in 2002, its share price was hovering around $6. A series of good quarters later it ended 2003 at $29 before tumbling in January 2004 to level off at $10. Years later, in July 2011, when shares were at the $300 mark it plummeted to $58 by October 2012 on news of stagnant growth, price increases and a failed spinoff of Netflix’s legacy DVD rental business.
“Every time I read a story about how Netflix is the highest appreciating stock in the S&P 500 it worries me,” Hastings said during an earnings conference hosted on YouTube. “We have a sense of momentum investors driving the stock price more than we might normally. There’s not a lot we can do about it, but I wanted to honestly reflect upon it.”
While Netflix grew on the increasing trend of “cord cutting”, consumers canceling their cable subscription, during the last few years it now faces the new challenge: cable and satellite providers in the United States and Canada are adding more subscribers than they are losing. Ironically, as recent rumors have suggested, this might bring Netflix to the medium it was trying to kill in the first place.