Consumers outside the United States drove revenue and subscriber growth for Netflix Inc. in the second quarter. The subscription-based streaming video service, No. 6 in the Internet Retailer 2015 Top 500 Guide based on its North American web sales, grew its international revenue 47.9% during the quarter, and overall revenue 22.4% to $1.64 billion.
27.7% of total revenue in Q2 came from Netflix’s international operations. A year ago, 22.9% of revenue came from international. Netflix executives emphasized their global growth in a letter to shareholders. Netflix launched service in Australia and New Zealand at the close of the first quarter, and plans to launch in Japan in the current quarter. Spain, Italy and Portugal will get Netflix in October. China is on the horizon for 2016, the company says.
2.37 million consumers outside the United States signed up for Netflix in Q2, up 111% from a year earlier. Netflix added 900,000 U.S. subscribers in Q2 versus 570,000 a year earlier.
During the quarter, Netflix also rolled out a new website design, its first major design update in four years. The new design delivers a “more visual experience,” the company says, that works “more like an app and less like a series of linked web pages.” Navigation includes slideshow-style images that users can mouse or swipe through. Netflix is also working to update the recommendations engine to personalize suggested content for users, and the site’s usability across devices.
“The core is really continuing to improve the personalization, being able to more and more accurately present content on the screen, whether that’s a TV screen or a phone screen that a consumer is just very motivated to click on and watch,” chairman and CEO Reed Hastings said in a call with analysts reviewing the Q2 financials.
For the second quarter ended June 30, Netflix reported:
- Revenue of $1.64 billion, up 22.4% from $1.34 billion in Q2 2014.Net income of $26.3 million, down 63.0% from $71.0 million in Q2 2014.
- 42.3 million domestic streaming subscribers, who together generated $1.03 billion in revenue, up 22.9-% from $838.2 million in Q2 2014.
- 23.25 million international streaming subscribers, who together generated $454.8 million in revenue, up 47.9% from $307.5 million in Q2 2014.
- 5.31 million domestic DVD-by-mail subscribers generated $164.0 million in revenue, down 15.8% from $194.7 million.
For the six months ended June 30, Netflix reported:
- Total revenue of $3.22 billion, up 23.4% from $2.61 billion a year earlier.
- Net income of $50.0 million, down 59.7% from $124.1 million a year earlier.