LOS GATOS, Calif. – With so much of the world still forced to remain home as much as possible (working or not), leading streamer Netflix announced Thursday it added 26 million customers in the first half of its fiscal year, ended June 30, 2020, compared to 12 million in the first six months of 2019.
10.1 million were added in the second quarter alone, compared to an addition of 2.7 million in Q2 2019. The company added 28 million subs in all of 2019.
In Q2, revenue grew 25% year-over-year to US$11.9 billion, while quarterly operating income exceeded $1 billion. Net income more than doubled to $1.4 billion as marketing and content costs decreased. The company spent $5.8 billion on content in the first half of the year compared to $6.32 billion in the same 2019 time frame.
Streaming ARPU increased 0.4% year over year, but excluding a $289 million impact from foreign exchange, streaming ARPU grew 5% year over year. Operating margin expanded 770 basis points year over year to 22.1%, too, added the company’s letter to shareholders.
That said, the company cautioned that this huge growth is now slowing (either as people are allowed to get out more as Covid restrictions are lifting, or maybe they’ve just watched everything by now…).
Netflix is forecasting to add 2.5 million new net adds in the third quarter, down from 6.8 million added in Q3 2019 (see chart from the shareholders’ letter). That quarter included the positi
ve impact of new seasons of both Stranger Things and La Casa de Papel (Money Heist).
The company breaks down its numbers for the U.S. and Canada and in Q2 2020, subscribers totaled 72.9 million, an 8.6% increase over the end of the second quarter of last year.
When it comes to its production slate and how the Covid-19 pandemic has affected it, the shareholders’ letter had this to say: “Since our content production lead time is long, our 2020 plans for launching original shows and films continue to be largely intact. For 2021, based on our current plan, we expect the paused productions will lead to a more second half weighted content slate in terms of our big titles, although we anticipate the total number of originals for the full year will still be higher than 2020. We’ll also round out our content offering with film acquisitions like The Trial of the Chicago 7 from Aaron Sorkin and The Spongebob Movie: Sponge on the Run (global excluding US and China). We also acquired nearly completed seasons of unreleased original series like Cobra Kai (seasons 1, 2 and a brand new season 3) and Emily in Paris starring Lily Collins.
Netflix also announced chief content officer Ted Sarandos will be appointed to the board of directors and add the title of co-CEO with Reed Hastings. “Ted has been my partner for decades,” said Hastings in the letter. “This change makes formal what was already informal – that Ted and I share the leadership of Netflix.”
As well, Greg Peters has been appointed to COO adding to his chief product officer role.
For more on the company’s results, please click here.
