“First quarter results showed strong momentum driven by consumer attraction to our unlimited rental proposition,” said Reed Hastings, Netflix co-founder and chief executive officer. “We added more net
subscribers than in any previous quarter in our history and grew year-over-year GAAP EPS by 76 percent.”
Highlights from the release:
- Q1 Subscribers hit 10.3 million, up from 9.3 million subscribers in Q4 2008.
- Revenue increased to $394.1 million in Q1, up from $359.6 million in Q4.
- Gross margin was 34.2%, a slight decrease from Q4.
- GAAP net income was $22.4 million.
- Subscriber acquisition cost was $25.79, down from $26.67 in Q4.
- Churn was 4.2%, unchanged from Q4.
- Q2 subscribers at 10.4 to 10.6 million, and 11.2 to 11.8 for the year.
- Revenue of $403 to $409 million in Q2, with $1.63 to $1.67 billion for 2009.
- GAAP net income of $27 - $32 million for Q2, and $96 to $106 million for the year.
- Netflix has been testing a machine for testing DVDs for scratches and cracks, and will be rolling this out to all 58 shipping centers this year.
- Saturday processing will also be rolled out to all shipping centers this year.
- Hastings said that DVD rental kiosks are their biggest threat, and there are now more kiosks than video stores.
- New releases only account for about a third of rentals.
- Netflix is considering a streaming-only plan, but does not have plans to launch one at this time.