Netflix adds 2 mn subscribers; market cap reaches $100 bn

Netflix Inc has registered 2 million more subscribers than Wall Street expected in the final three months of 2017, and tripling profits.

With the results, Netflix now boasts a market capitalisation of over $100 billion for the first time.

Shares shot 9 per cent to over $248 in after-hours trading yesterday after rallying throughout the month and rising 53 per cent last year.

The company has signed up over half of all US broadband households and, thanks to its customer base in 190 countries, it is spending billions on programming.

After picking up 6.36 million subscribers in international markets from October through December, Netflix released new seasons of critically acclaimed shows "Stranger Things" and "The Crown" as well as the Will Smith action movie "Bright."

According to FactSet, with the shows, the company beat Wall Street expectations of 5.1 million.

Besides 1.98 million customer additions in the US, the company ended the year with 117.58 million streaming subscribers around the globe, despite a hike in price in October.

"Netflix is pouring more and more money into making content, and it is directly translating into more subscribers," BTIG analyst Richard Greenfield said, Reuters reported. "They see a huge opportunity and they are moving as fast as they can to attack it."

Bloomberg compared Netflix with Uber, saying both companies are impressive growth machines that rely on outside funding to maintain the momentum. Also the real trajectory of both businesses, if access to capital dried up, would be difficult to tell.

Ovide points out that just like Uber, growth comes at a cost for Netflix and that cost is the huge sums of money Netflix has spent over three years to finance its globe-trotting ambitions, and to purchase rather than rent more of the TV shows and movies the company makes available to streaming subscribers.