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Netflix (s NFLX) continues to see its subscriber numbers and earnings increase due to strong interest and customer adoption of its Watch Instantly streaming service. With more than 60 percent of users logging in to stream videos, Netflix blew away Wall Street earnings estimates and looks to continue its strong growth throughout the rest of the year.
In the second quarter, Netflix added a million subscribers, ending the period with 15 million subscribers in total. That was up 42 percent from the previous year’s total of 10.6 million and up 7 percent from the 14 million subscribers it had at the end of the previous quarter. The subscriber additions weren’t quite as robust as in the first quarter, when Netflix added 1.7 million subscribers, but they were strong enough to see the company increase its full-year forecast yet again.
Revenue for the quarter came in at $519.8 million, which was 27 percent higher than the prior year’s second-quarter sales of $408.5 million, and 5 percent above the $493.7 million it posted in the first quarter. The company recorded net income of 80 cents a share, compared to 54 cents a share in the second quarter 2009 and 59 cents a share in the first quarter of this year. Non-GAAP net income was 88 cents a share, which was well above analyst consensus forecasts of 70 cents a share.
The subscriber additions and better-than-expected earnings are being driven in part by adoption of its streaming video service. Netflix reported that 61 percent of its subscribers streamed more than 15 minutes of video during the quarter, which is up from 37 percent during the second quarter of 2009 and 55 percent during the first quarter.
Netflix updated its forecasts to reflect even greater growth than was earlier anticipated. It expects to end the year with between 17.7 million and 18.5 million subscribers, up from its previous forecast of 16.5 million and 17.3 million million. It also revised its revenue forecast for a year-end range of $2.14 billion to $2.16 billion (from $2.11 billion to $2.16 billion), and earnings per share of $2.58 to $2.86, up from a forecast of $2.41 to $2.63.
Related content on GigaOM Pro: Slow and Steady, Netflix Pulls Ahead in Streaming Video (subscription required)