Netflix’s big international conquest is starting to pay off (NFLX)

pulse

April 18, 2017 10:53 PM

Netflix's international business is starting to mature like it is back home.

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Netflix reported its latest quarterly earnings on Thursday, which were mixed. The streaming giant’s stock has taken a slight tumble after reporting lower-than-anticipated subscriber growth across the board, though the company says it expects to rebound big next quarter.

One bright spot for this quarter, however, is its international business. As this chart from Statista shows, Netflix says its international streaming segment turned a profit for the first time this past quarter (excluding a $12 million “impact from currency”). Its prior losses were mainly due to the fact that the company has been investing so much in expansion in the first place, but now those efforts are starting to bring a return.

For now, at least — Netflix says it will continue to invest internationally, to the point where it projects a small loss in the segment next quarter. But at this point, it’s clear that Netflix is a truly global company.

That expansion also helps explain why Netflix plans to burn through cash for the foreseeable future. Instead of being forced to juggle licensing rights for every country, the company is spending big money on original content, which it can send out to everyone without much hassle. How successful that content is will help determine how successful Netflix will be in the long term.

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