Netflix, Inc. (NASDAQ:NFLX) reported its fourth-quarter earnings on Monday, which did not disappoint. Shares have been up more than 8% in after-hour trading as the company met expected earnings per share of $0.41 while revenues of $3.29 billion were slightly higher than the $3.28 billion that was expected by analysts.
The biggest surprise came in streaming, where domestically the streaming giant added 1.98 million subscribers, which was more than the 1.29 million that was estimated. Internationally, Netflix continued to see significant growth with 6.36 million net additions in Q4 compared to an estimated 5.1 million.
Not only did the company produce a strong quarter to end the year, but guidance for Q1 is also higher than what was expected as Netflix does not expect to slow down anytime soon.
Much of Netflix’s growth has come internationally, and that will need to continue if the company is going to be able to keep on growing its subscribers, as the domestic market has become quite saturated.
The looming challenge, however, is how the company will be able to compete when Walt Disney Co (NYSE:DIS) launches its own streaming service in 2019, which is likely to chip away at some of Netflix’s subscribers. As more companies go the route of online streaming, Netflix’s library will be sure to shrink, and it could ultimately come down to which company is able to produce the best content. While Netflix has been doing a good job so far, how it can stack up against Disney will be the big question.
In the past year, Netflix’s stock has risen more than 64%, and these latest results will send the share price even higher.