Following the release of its latest financial earnings, shares in streaming giant Netflix skyrocketed by 13% in pre-market trading on Wednesday. This outcome is in stark contrast to the earnings shortfall suffered by Netflix on Tuesday evening.
The online streaming service outperformed the majority of market estimates in its latest quarterly earnings, including its net sales ($6.64 billion compared to its $6.63 billion estimates), diluted earnings per share ($1.19 versus its $1.36 estimate), and global paid subscriber additions (8.51 million versus an expected 6.03 million).
Most notably, Netflix exceeded 200 million paid subscribers for the first time in its history, a feat that is largely attributed to the consumer trend towards consuming more content at home amid the coronavirus pandemic.
While the company was able to exceed new subscriber expectations on all fronts, Netflix did particularly well at drawing in mature viewers based in the U.S. and Canada, netting nearly 900,000 new subscribers in this demographic.
In addition to exceeding expectations in terms of its latest quarterly earnings, Netflix also raised its cash flow guidance in 2021 by $1 billion to break even.
According to Jefferies analyst Alex Giaimo, “Netflix has been working towards this moment for multiple years, and is now in the unique position to continue its aggressive content spend while still generating significant future cash flows.”
