Netflix Q3 revenue rises 23% as subscriber total climbs 61%
Revenue at online DVD rental service Netflix.com rose 23% year-over-year to $174.3 million for the third quarter ended Sept. 30, as the number of subscribers rose 61% to 3.6 million, Netflix Inc. said today.
"The third quarter provided a good view of the power and potential of the Netflix model, coupling strong subscriber growth with the cost benefits of our increasing scale," said Reed Hastings, Netflix co-founder and CEO.
Net income in the quarter fell 63.5% to $6.9 million, down from $18.9 million in the year-ago period, Netflix said. The drop in net income reflected rising costs related to fulfillment, marketing and general administrative operations. It also included a $3.2 settlement of a previously announced lawsuit. Gross margin for the quarter was 43.2%, down from 49.5% a year ago.
Netflix added 921,000 subscribers in Q3, representing a 56% rise in the number of subscribers added in the year-ago quarter. Of the 3.6 million total subscribers at the end of the quarter, 95% were paid subscribers, down from 97% paid subscribers a year ago, Netflix said.
Subscriber churn in Q3 was 4.3%, compared to 4.7% a year ago. Churn represents the number of paid and free subscribers who don’t renew their monthly subscription during the quarter.
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