How Netflix Knocked It Out of the Park in Q2

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Netflix, Inc. (NASDAQ: NFLX) reported second quarter financial results after markets closed Monday. The online streamer said that it had $0.15 in earnings per share (EPS) and $2.785 billion in revenue, compared with consensus estimates from Thomson Reuters that called for $0.16 in EPS and $2.76 billion in revenue. The same period from last year had $0.09 in EPS and $2.11 billion in revenue.

For the second quarter, global net adds totaled a Q2-record 5.2 million (vs. forecast of 3.2 million) and net additions increased 5% sequentially, bucking historical seasonal patterns. For the first six months of 2017, net adds are up 21% year-on-year to 10.2 million.

The U.S. segment had a total of 1.07 million net additions for the quarter, while the international segment pulled in 4.14 million net adds. At this point, the international segment now accounts for 50.1% of the total membership base.

In terms of guidance, the company expects to see $0.32 in EPS and $2.97 billion in revenue for the third quarter. At the same time, Netflix expects to see 4.40 million in net additions for the quarter, making a total of 108.35 million memberships.

On the books, cash, cash equivalents, and short-term investments totaled $2.2 billion at the end of the quarter, compared with $1.7 billion at the end of the previous year.

Second quarter free cash amounted to -$608 million versus -$254 million in the year ago quarter and -$423 million in the first quarter of 2017. Netflix anticipates free cash flow of -$2.0 billion to -$2.5 billion for the full year 2017.

Shares of Netflix closed Monday at $161.70, with a consensus analyst price target of $160.68 and a 52-week range of $84.50 to $166.87. Following the release of the earnings report, the stock was up nearly 9% at $175.90 in the after-hours trading session.