For subscription companies operating on a calendar year, June 30 marked the end of the second quarter for 2015, so Q2 reports are trickling in. Here are highlights from some of the biggest names in the subscription biz:
Amazon: The online retail giant reported quarterly net sales of $23.18 million, a 20% increase year over year, and operating income of $464 million, compared to an operating loss of $15 million from this time last year. The company named some of its biggest initiatives – the success of its first ever Prime Day, same-day-delivery in 14 U.S. metro areas, the launch of Prime Now in London, and 11 Emmy nominations for Transparent – among the reasons for its success. In a press release announcing the results, Amazon said it expects net sales to fall between $23.3 billion and $25.5 billion in Q3. Interestingly, the press release did not mention the recent antitrust allegations made against Amazon.
Apple: In a statement released last week, Apple CEO Tim Cook said the company had an amazing quarter with revenue up 33% and earnings per share up 45%. iPhone revenue is up 59% over the previous year, there have been strong sales for Mac, and the App Store has been driving record revenue from Apple services. Two significant launches also took place in Q2: the coveted Apple watch and the late-June launch of Apple Music. The company anticipates revenue of $49 billion to $51 billion in the next quarter. Cook said, “We generated very strong operating cash flow of $15 billion, and we returned over $13 billion to shareholders through our capital return program. [Note: For Apple, the period ended June 27, 2015 was its third fiscal quarter of 2015.]
Netflix: In a letter to shareholders, Netflix announced that, in Q2, it added 3.3 million new subscribers (0.9 million in the U.S. and 2.4 internationally), compared to 1.7 million new subscribers this time last year. The total number of Netflix subscribers has jumped to 65 million members, with 42 million the U.S. and 23 million internationally. Netflix attributes its recent success to the launches of new Netflix series, including Marvel’s Daredevil, Sense8, Dragons: Race to the Edge, and Grace and Frankie, along with the third season of Orange is the New Black.Netflix also launched a new website and user experience during Q2, its first major update in four years. For Q3, Netflix predicts 1.15 million new U.S. subscribers and 2.4 new international subscribers. The shareholder letter said, “We are at the forefront of a wave of global Internet TV adoption and intent to make our service available throughout the world by the end of 2016.”
Google: Google is also reporting a solid quarter with revenues of $17.7 billion and revenue growth of 11%, year over year. The $17.7 billion is broken down as follows: Google websites: $12.4 million; Google Network Members’ websites: $3.6 million; Total advertising revenue: $16 million; and $1.7 in other revenue, all increases year over year. Google omitted mention of Google News Lab which launched in June.Ruth Porat, CFO of Google, said, “Our strong Q2 results reflect continued growth across the breadth of our products, most notably core search, where mobile stood out, as well as YouTube and programmatic advertising. We are focused every day on developing big new opportunities across a wide range of businesses. We will do so with great care regarding resource allocation.”
Pandora: Pandora, which describes itself as the leading Internet radio service, announced that revenue for Q2 was $285.6 million, representing a 30% increase year over year. Ad revenue was $230.9 million, also a 30% increase year over year, and total mobile revenue of $229.7 million, a 37% increase year over year. Subscription and other revenue was $54.6 million, a 31% increase year over year. For Q2, total listener hours were 5.30 billion, a 5% increase over the same time last year.Pandora said it had 79.4 million active listeners at the end of June, compared to 76.4 million this time last year. Pandora estimates income for the third quarter to be between $310 million and $315 million. For the year ending December 31, 2015, Pandora projects revenue to be between $1.175 billion and $1.185 billion.Brian Andrews, Chairman and CEO of Pandora, said, “Our advertising investments, particularly in local, are paying off. This quarter, local ad revenue reached an all-time high, driving record RPMs.”