Netflix Users Number Rises, Stocks Up by 20%

Netflix surged more than 20 percent after reporting its streaming service signed up 3.57 million subscribers in the third quarter, vanquishing, for now, investor concerns about slowing growth at the world’s largest online TV network, according to Bloomberg.

In the next year, the company will become more profitable, providing fuel for original shows, Chief Executive Officer Reed Hastings told shareholders after results were announced. Netflix plans to spend a net $6 billion on programming in 2017, an increase of 20 percent.

The growth in subscribers reassured investors who have made Netflix one of the hottest stocks in recent years, believing the company can spur the adoption of on-demand TV globally, as it did in the U.S., and become a dominant global online entertainment company. Confidence in that trajectory was shaken three months ago when subscriber growth faltered. The company finished the third quarter with a better-than-projected 86.7 million customers worldwide.

“We are closing in on 100 million members, but I remind everyone at Netflix that Facebook and YouTube have 1 billion daily actives,“ Hastings said on a call with analysts. “We are so small compared to those other Internet video firms, and we have a lot of catching up to do.“

The company still faces hurdles, including subscriber growth that continues to slow. Netflix generates little or no profit and its programming budget is still burning through funds. With $1.3 billion in cash at quarter’s end, Netflix said it plans to borrow via a debt sale in the coming weeks.

“For the balance of 2016, we will continue to operate around break even, and then start generating material global profits in 2017 and beyond, by marching up operating margins steadily for many years,“ the company said in a statement.