Second quarter revenue for online DVD rental company Netflix Inc. rose 90% to $120.3 million from $63.2 million in Q2 last year, the company reported today. It represents the 10th consecutive quarter of year-over-year growth in excess of 70%, the company says.
Net income for the quarter was $2.9 million vs. $3.3 million in last year’s second quarter. Excluding stock-based compensation expenses, income for the quarter was $7 million vs. $5 million for the year-ago quarter, the company reports.
Netflix, No. 30 in Internet Retailer’s Top 300 Guide to online retailers, ended the second quarter of 2004 with 2.09 million subscribers vs. 1.1 million a year ago. During the quarter Netflix acquired 583,000 new trial subscribers, a 78% year-over-year increase from the 327,000 new trial subscribers acquired in the second quarter of 2003. The company paid $35.12 for each new subscriber in the quarter vs. $30.45 a year ago. The company says that for the third quarter of 2004, it expects subscriber acquisition cost to rise to $37 to $39 due to increased spending on television advertising and decreased on-line spending. The pull-back in online spending is in response to on-line advertising rate increases during the second quarter, the company reported.
Netflix reports that after it announced April 15 that it will raise its price effective June 15 to $22 a month from $19.95, the cancellation rate increased. But the increase was a spike and after that, the cancellation rate returned to what it was in the comparable period last year.
The company says it expects to end the year with as many as 2.7 million subscribers and revenue as high as $160 million.