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Netflix international revenue grew 48% year over year

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Staff writer ▼ | July 15, 2015
Netflix added a Q2 record 3.3 million new streaming members, compared to 1.7 million in the previous year quarter.
Netflix   EPS for Q2 amounted to $0.06 after adjustment
Netflix gained 0.9 million members in the US and added 2.4 million members internationally in Q2.

The company believes the higher than anticipated level of acquisition was fueled by the growing strength of our original programming slate, which in Q2 included the first seasons of Marvel’s Daredevil, Sense8, Dragons: Race to the Edge and Grace and Frankie as well as season 3 of Orange is the New Black.

US revenue growth was also driven by a 5% year over year increase in ASP due to uptake in its HD 2-stream plan.

Netflix continues to target a 40% US contribution margin by 2020, even though it is running ahead of plan given stronger than expected top line performance and lower content and other streaming costs. The company is forecasting Q3 US net adds of 1.15 million, slightly higher than the year ago period.

Netflix projects Q3 international net adds of 2.4 million. International revenue grew 48% year over year, despite an -$83 million impact from currency (+5% ASP growth x-F/X).

International losses increased sequentially with a full quarter of operating costs in AU/NZ. Netflix expects this trend to continue in the second half as we launch additional markets (Japan in Q3 and Spain, Italy and Portugal in Q4) and prepare for further global expansion in 2016, including China as its continue to explore options there.

EPS for Q2 amounted to $0.06 after adjustment for 7-for-1 stock split, EPS would have been $0.42 using pre-split share count. Netflix remains committed to running around break-even globally on a net income basis through 2016, and to then deliver material global profits in 2017 and beyond.