Netflix revenue up 20% as rentals boom in the recession
Netflix, the DVD-by-mail subscription company, saw revenue surge 21% in the second quarter that ended June 30 to $408.5 million, it said today. Net income was $32.4 million, up 22% from the same period a year ago.
Netflix added 289,000 new net subscribers, bringing its total to 10.6 million. In the same quarter last year, it added 168,000.
Revenue growth and subscriber additions were both on the upper end of the company's previous forecast, while net income exceeded the guidance it provided when reporting first quarter earnings.
Netflix's strong performance during the recession mirrors an overall industry trend that has seen movie rentals rising and purchases falling during the recession. Last week the Digital Entertainment Group, a home entertainment trade organization, reported that rental revenue rose 8.3% in the first six months of the years, while DVD sales were down 13.5%.
The company also raised its business forecast for the full year. It's now predicting it will reach between 11.6 million and 12 million subscribers by Dec. 31. It said revenue will be between $1.65 billion and $1.67 billion and net income will be $99 million to $109 million.
In initial after-hours trading, Netflix stock rose 4% on the positive news. Shares closed at $46.46 before earnings were announced, up 55% for the year.
Photo: Netflix corporate headquarters in Los Gatos, Calif. Credit: Paul Sakuma, AP.