In a quarter that included a major European expansion, Netflix’s total revenue tops $1.4 billion, but fewer than expected new consumers signed up.

Netflix Inc. revenue climbed 27.5% and net income 86% in the third quarter, but the video streaming company fell short of its forecast for new customers. The e-retailer reported today that it added 3.02 million new customers in Q3; its forecast was 3.69 million.   

Most the customers who signed up, 2.04 million, came from outside the United States. International streaming revenue grew 89% year over year and accounted for 28% of total revenue. In September, Netflix launched streaming services in France, Germany, Austria, Switzerland, Belgium and Luxembourg.

In their letter to shareholders, Netflix CEO Reed Hastings and chief financial officer David Wells also addressed the competitive threat HBO plays. News broke today that HBO will begin to offer HBO as a streaming service separate from any cable or satellite company. “It was inevitable and sensible that they would eventually offer their service as a standalone application,” they wrote. “Many people will subscribe to both Netflix and HBO since we have different shows, so we think it is likely that we both prosper as consumers move to Internet TV.”

For the quarter ended Sept. 30, Netflix, No. 7 in the 2014 Internet Retailer Top 500 Guide, reported:

•Total revenue of $1.41 billion, up 27.0% from $1.11 billion in Q3 2013. Total revenue for the nine months ending Sept. 30 is $4.02 billion, up 25.6% from $3.20 billion.

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• Net income was $59.3 million, up 86.5% from $31.8 million in Q3 2013. For the year through Sept. 30, it is $183.4 million, up 186.0% from $64.0 million.

• 37.2 million domestic streaming subscribers, who together generated $877.2 million in revenue, up 25.1% from $701.1 million in Q3 2013. To date, domestic streaming revenue is $2.51 billion, up 24.8% from $2.01 billion.

• 15.8 million international subscribers, who together generated $345.7 million in revenue, up 88.8% from $183.1 million in Q3 2013. To date, international streaming revenue is $920.3 million, up 87.4% from $491.0 million.

• 6.0 million domestic DVD subscribers generated $186.6 million. Netflix’s domestic DVD subscribers have been declining for the past several quarters, and were down 15.4% from 7.1 million in Q3 2013. For the nine months ending Sept. 30, Netflix reported the DVD-by-mail service generated $585.7 million in revenue, down 16.0% from $697.5 million a year ago.

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