Summary
Netflix reported solid financial results for the second quarter ended June 30, 2009, demonstrating continued growth in its subscriber base and revenue. Revenue increased by 21.0% year-over-year to $408.5 million, driven by a 25.4% rise in average paying subscribers. This subscriber growth was partially offset by a slight decrease in average monthly revenue per paying subscriber, indicating a shift towards lower-priced plans. Profitability also saw significant improvement, with net income rising 22.1% to $32.4 million, and diluted earnings per share increasing to $0.54. The company's gross margin expanded to 34.1%, up from 31.8% in the prior year, reflecting improved operational efficiencies and the increasing popularity of lower-priced plans which, counterintuitively, contributed to higher gross profit per subscriber due to favorable revenue to cost ratios. Despite ongoing investments in technology and content, the company maintained strong operating income and positive cash flow from operations.
Financial Highlights
44 data points| Revenue | $408.51M |
| Cost of Revenue | $269.24M |
| Gross Profit | $139.27M |
| R&D Expenses | $27.12M |
| Operating Expenses | $86.48M |
| Operating Income | $52.78M |
| Interest Expense | $674K |
| Net Income | $32.44M |
| EPS (Basic) | $0.01 |
| EPS (Diluted) | $0.01 |
| Shares Outstanding (Basic) | 4.05B |
| Shares Outstanding (Diluted) | 4.18B |
Key Highlights
- 1Revenue increased 21.0% year-over-year to $408.5 million.
- 2Net income grew 22.1% year-over-year to $32.4 million.
- 3Diluted Earnings Per Share (EPS) rose to $0.54, a 28.6% increase year-over-year.
- 4Total subscribers reached 10.6 million, up 26.0% from the prior year.
- 5Gross margin improved to 34.1% from 31.8% in the same period last year.
- 6Subscriber acquisition cost decreased by 17.3% year-over-year, indicating improved marketing efficiency.
- 7The company continued its share repurchase program, buying back approximately $73 million in stock during the quarter.