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Updates on the Tech Sector: Alphabet, Apple, and Netflix

PART:
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Part 5
Updates on the Tech Sector: Alphabet, Apple, and Netflix PART 5 OF 7

Why Netflix’s Mobile Revenue is Critical for the Company

Netflix now has the highest grossing app

Netflix’s (NFLX) fiscal 2Q17 US revenue from Google Play Store and iOS App Store was the highest among apps, according to App Annie. Netflix’s active US mobile users surged 20% YoY (year-over-year) to 70 million. There are typically more active users than subscribers, as there are multiple users per subscription. Currently, there are 52 million Netflix subscribers in the United States.

Revenue includes Netflix subscriptions bought through the app on a handset or a tablet. The app made $153 million in revenue, which is a 233% hike from the same quarter last year, according to TechCrunch. The surge in mobile revenue suggests that subscribers are gradually preferring to use Netflix on their mobile devices. However, although Netflix’s app revenue is growing at a breakthrough rate, it still represents only 5.5% of the company’s total revenue.

Why Netflix’s Mobile Revenue is Critical for the Company

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Netflix’s app revenue is a small portion its total revenue

The company released its earnings results last week. It easily beat analyst expectations, adding a whopping 5.2 million subscribers in 2Q17 to reach 100 million. Most of this growth is due to an increase in mobile subscriptions.

While the company saw robust subscriber growth in regions outside the United States, its domestic business is slowing down. Netflix earned revenue of $2.8 billion, a 32% rise from the same quarter last year.

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