Netflix is the best thing to ever happen to TV.
For $10, you get access to tens of thousands of TV shows, movies, comedy specials, and more. Instead of trekking to a video store, you simply press a button and watch what you want. There’s no waiting for something to show up on cable. There are no premium add-ons, other than slightly better quality for $2 more. It’s simple, it’s addicting, and millions of people love it.
Yet keeping Netflix up and running doesn’t come cheap. The company spends billions every year to make their own content and license (or rent) content from other companies. Also, since a chunk of the world’s internet traffic is used to watch Netflix, sending all those movies and TV programs to your home adds up. With all this spending going on, how are they supposed to make any money?
This was the question on every investor’s mind for the last few months. With Netflix spending more on content, traffic, and expanding to different countries, it would seem difficult for them to turn a profit.
Luckily, they did. Not only did Netflix turn a profit in the last three months, they actually did a whole lot better than anyone expected…and this is making investors really happy.
Netflix beat their expectations by a lot. They increased members, their income went up, and their international business is booming.
Netflix’s earnings took everyone by surprise, so investors are more interested in investing in their company. Since there’s more demand to invest in Netflix but the same amount of shares in the company, Netflix’s stock price escalated by 20% upon revealing this good news. However, they don’t get to rest easy jut yet; they still have another quarter to go, and they’re still trying to turn a bigger profit while spending just as much — if not more — on quality, original content.
Share this chart with your friends who love Netflix, and then flip it over to see what it looks like in the Upside-Down.