While Netflix's (NASDAQ: NFLX) slower-than-expected subscriber growth in its first quarter has received lots of attention since the results were posted earlier this week, investors shouldn't overlook the valuable insights in the streaming-TV company's earnings call. Key topics during the call included a look at Netflix's international potential, why management envies YouTube, what to expect from the U.S. market, and more.
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Here are five telling quotes (via a Reuters transcript) from Netflix's first-quarter earnings call.
Image source: Netflix.
The internet: still a "phenomenal opportunity"
Noting that the company expects to cross the 100 million subscriber mark this weekend, one analyst asked Netflix CEO Reed Hastings about what hitting this milestone means for the company's longer-term outlook. In Hastings answer, he turned his focus to the big opportunity on the internet.
Hastings was careful to emphasize that, unlike Facebook and Alphabet's (NASDAQ: GOOG) (NASDAQ: GOOGL) YouTube, Netflix is a paid service and is not ad supported. But he also noted that Netflix isn't as entrenched in international markets as these companies.
Perspective on Netflix's international potential
To help investors put Netflix's international opportunity into context, Netflix CFO David Wells noted that the company's uncanny penetration in the U.S. market bodes well for abroad potential.
Netflix envies YouTube
Asked about user consumption on Netflix, Hastings said that while user viewing is "very large and growing," it's "nowhere near as big as YouTube's, so we definitely got YouTube envy and we've got a lot of room to go."
Netflix has good reason to envy YouTube. It's a juggernaut. With over a billion monthly active users, YouTube is not only the world's largest streaming video platform, but it's also one of the world's largest social networks. In addition, Alphabet says people watch hundreds of millions of hours of videos on YouTube and generate hundreds of billions of views every day.
Image source: Netflix.
Expect more growth in the U.S.
While Netflix's 1.4 million U.S. member additions in Q1 were lower than its 2.23 million domestic additions in the year-ago quarter, Hastings is still optimistic about growth potential in the U.S. market.
As these quotes show, one overarching theme stood out from the call: Though Netflix member growth has slowed, management is adamant that its total subscriber count is far from peaking.
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