Netflix’s stocked soared over 10% in after-hours trading last Tuesday after the Q2 earnings call in spite of an EPS miss at $0.15/share (vs. $0.16 projected). Since Netflix is still growing rapidly, the stock trades mostly on subscriber growth, rather than earnings. As you can see from the chart below, subscriber growth, especially in International Markets, blew out analyst estimates:
Netflix Subscriber Growth Vs. Estimates
Since subscriber growth is not as easily analyzed by the core public financial data companies are required to release, we used Sentieo to look at alternative datasets like keywords in earnings transcripts, search volume, Twitter mentions, and website traffic to analyze Netflix’s incredible performance
First, we looked at words tied to international markets that were referenced in transcripts using our earnings call Keyword Tracker:
Mentions of keywords in Netflix Earnings Call Transcripts
Notice that Europe, Asia, Korean, and Germany saw their largest number of conference call mentions ever when comparing to previous earnings calls. Reed Hastings continued to speak to success with content creation in Europe and Latin America, but also has his sights set on Asia:
Snippets from the most recent $NFLX Earnings Call
NFLX’s chief of content creation, Ted Sarandos, spoke specifically about Korea and Okja (a Korean-Hollywood collaboration that has been a huge hit for Netflix) both of which were surfaced in the keyword tracker above:
Snippets from the most recent $NFLX Earnings Call
Plugging Okja into Mosaic (our alternative data visualization tool), we’re able to see social chatter around the time of the Cannes festival as well as the release towards the end of the quarter:
Okja Twitter Mentions
It will be key to see if Netflix’s local content internationally will build as much buzz as other key hits like House of Cards, Stranger Things, and Orange is the New Black. In the chart below we see that House of Cards’ most recent season was pretty successful, while Orange is the New Black sputtered:
Twitter Mentions of Popular US Netflix Shows
The Q2 concentration of hits like “13 Reasons Why” had a direct impact on overall Netflix traffic as is evidenced by site traffic, twitter mentions, and search volume. When overlaying those traffic measures on top of Subscriber Growth we saw a high correlation and for the last few quarters, a predictive trend for subscriber growth.
Mosaic Alternative Data vs. Netflix Subscriber Growth
