Strong demand for cheap entertainment bolstered Netflix’s revenues, and lower subscriber acquisition costs boosted the company’s profits. Net income came in at $22.4 million for Q1 ($0.37 per diluted share), up 68 percent year-over-year (though down slightly sequentially.)
Revenue came in at $394.1 million, up 21 percent year-over-year, and up 10 percent from the previous quarter. The company narrowly beat analysts’ estimates of an EPS of $0.33 on $391.1 million in revenue, per MarketWatch.
— Subs: The movie-rental company topped the 10 million subscriber mark in early February; it ended the quarter with just over 10.3 million subscribers, up 25 percent from year-over-year, and up 10 percent sequentially. Netflix (NSDQ: NFLX) paid $25.79 to acquire every new subscriber; down 12 percent year-over-year, and down slightly sequentially.
More highlights after the jump.
– Churn: Up slightly to 4.2 percent for the quarter, compared to 3.9 percent in Q108.
— Free cash flow: Up $15.1 million, nearly two times the $4.8 million worth of free cash in Q108, but down significantly from $51 million the previous quarter.
— Improved outlook: Netflix kept its Q2 outlook unchanged, but raised its year-end revenue forecast. The company expects to generate between $1.63 billion and $1.67 billion in revenue this year (up from its previous forecast of $1.58 billion to $1.63 billion). It also expects more subscribers: 11.2 million to 11.8 million customers in 2009 (it had only forecast 10.6 million to 11.3 million).