Online DVD rental service Netflix has posted profits for Q2, beating analysts expectations by a wide margin.
Revenues for Q2 were $164.5 million, growing 37 percent from the year-ago quarter. Profits in Q2 were $5.7 million, compared to $2.9 million in the year-ago quarter. The previous guidance from the company was an expected net loss of $2.2 million to $7.2 million. The outperformance is due to a number of factors including: “lower-than-expected marketing, better-than-expected cost management as well as lower-than-expected stock-based compensation expense”.
Netflix ended Q2 with approximately 3,196,000 total subscribers, representing 53 percent year-over-year growth from 2,093,000 total subscribers at the end of Q2, 2004.
AP: Netflix also is gearing up to introduce a service that will enable customers to download a handful of movie titles late this year. Netflix has earmarked 1 percent to 2 percent of its annual revenue for investments in the downloading service.
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