Netflix (NASDAQ: NFLX) keeps on growing, with more 137 million total members, including 130 million paid subscribers. Yesterday, Netflix released its third quarter financials, revealing another strong quarter with 36 percent growth in streaming revenue. In the company’s October 16 shareholder letter, Netflix reported total revenue of $4.0 billion, a 34 percent increase year-over-year.

“Our broad slate of original programming helped drive a solid quarter of growth with streaming revenue increasing 36 percent year-over-year and global membership surpassing 130 million paid and 137 million total. We’re thrilled to be growing internet entertainment across the globe,” said Netflix in the shareholder letter.

Other highlights from the quarter include:

• Operating income was $481 million, and operating margin was 12.0 percent, exceeding Netflix’s forecast of 10.5 percent.
• Net income was $403 million, or $0.89 per share, compared to $130 million, or $0.29 per share, in Q3 2017.
• Total streaming revenue was $3.91 million, a 36 percent increase year-over-year.
• Netflix reported 130.42 million paid memberships, including 6.07 million paid net additions. Total memberships are now 137.10, including net additions of 6.96 million.
• U.S. streaming revenue was $1.94 billion with 58.46 million total memberships, including net additions of 1.09 million.
• International streaming revenue was $1.97 billion with 78.64 million total memberships, including 5.87 million net additions.

In its shareholder report, Netflix said it strives for accuracy with its forecast, but it will sometimes be over or under what it predicts. For Q3, Netflix underestimated membership totals, with 7.0 million net additions, an increase of 31 percent over 5.3 million net additions this time last year. Netflix attributes this change to higher-than-anticipated global growth, particularly in Asia.

Operational highlights from the quarter include:

• The selection of Albuquerque, New Mexico as the site of a new production hub which will bring $1 billion in production over 10 years and create up to 1,000 production jobs annually
• Launched new seasons of Orange is the New Black, Ozark and Marvel’s Luke Cage
• Released limited series Maniac with Emma Stone and Jonah Hill
• Premiered Disenchantment
• Released original films including Like Father, Sierra Burgess is a Loser and To All the Boys I’ve Loved Before
• Netflix originals had 112 Emmy nominations across 40 shows, documentaries and specials across nearly every category and they tied HBO for most Emmy wins with 23 awards.

“We’ve come a long way in the five years since launching original content on Netflix,” wrote the company. “In addition to our commercial success, we’re ecstatic when the creators we work with are recognized for their inspiring work.”

The company forecast the following for the fourth quarter of 2018:

• Paid net additions of 7.6 million and total net additions of 9.4 million
• Operating margin of approximately 5 percent
• Reclassification of some personnel costs from G&A to Content and Marketing and Technology and Development to Other Cost of Revenues, which should not impact total operating expenses, profit or margin
• The company will roll out its partnership with Sky U.K.

As always, in their investor report, Netflix addresses growing competition across entertainment platforms including linear TV, YouTube, video games, web browsing, social media, DVD, pay-per-view and more.

“We lose most of the time, but we win enough to keep growing,” said Netflix.

It seems investors were anticipating a strong report. On Thursday, October 11, Netflix stock was $321.10 per share. It jumped to $339.56 per share on Friday, dipped to $333.13 per share on Monday, and as of 7:59 p.m. EDT yesterday, Netflix stock was $346.40 per share. By comparison, on October 18, 2017, Netflix was valued at $194.54 per share.

Insider Take:

Considering the growing competition, it is somewhat surprising that the company exceeded its forecast in terms of membership by so much. However, Netflix is the gold standard for streaming services as far as we’re concerned. Not only do they have longevity and they are continually adapting to an improved user experience, but they have content nailed. They know their international audience is growing, so they cater to that group with new programming. They know what their U.S. audiences like too, and they continue to produce award-winning shows and movies and to acquire popular shows. Netflix’s stock value in the last year bears that out. Netflix is doing streaming right. Anyone wanting a piece of that pie is going to have to work awfully hard to compete.