Subscriber Adds Drive Netflix (NFLX)

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Netflix, Inc. (NASDAQ: NFLX) is out with its earnings and the film rental giant reported earnings of $0.78 EPS and $553.2 million in revenues.  Thomson Reuters had estimates of $0.72 EPS and $550.95 million in revenues.

As far as guidance, Netflix sees revenue of $586 to $598 million versus $580 to $596 million previously offered and its earnings guidance is unchanged at $0.59 to $0.74 non-GAAP EPS.  Thomson Reuters has estimates of $0.71 EPS and $592.82 million in revenues.

Net subscriber adds were 1,932,000 compared to an increase of 510,000 for the same period in 2009 and versus a gain of 1,034,000 for the second quarter of 2010. Netflix has approximately 16,933,000 total subscribers now, representing 52% growth from a year ago and 13% sequential growth.  Gross subscriber additions for the quarter totaled 4,101,000.
Subscriber acquisition cost was $19.81 per gross subscriber addition compared to $26.86 for the same period of 2009 and $24.37 for the second quarter of 2010.

The company now sees its ending subscribers at the end of the fourth quarter of 19.0 to 19.7 million, up from 17.7 million to 18.5 million.

Gross margin was 37.7% versus 34.9% a year ago and versus 39.4% one quarter back.

Netflix is soaring due to the additions being so much higher.  Shares closed up 2.6% at $153.22 and the after-hours reaction has shares up 10.4% around $165.00.