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Netflix Breaks Down Results by Region, Showing Strong Asia-Pacific, Europe Growth

Netflix has disclosed operating results for its international business by region for the first time, showing solid growth particularly in Europe and Asia-Pacific with triple-digit increases in revenue and subscribers over the last two years.

The streamer reported the historical figures in an 8-K filing Monday with the SEC. Starting with the fourth quarter 2019, Netflix will report financial results by international region.

In the Asia-Pacific region, revenue over the past two years grew 153%, to $382 million at the end of the third quarter of 2019. Streaming subscribers grew 148% over that time period, to 14.49 million paying customers in Q3 2019.

For the European region, which includes the Middle East and Africa, subscription revenue increased 105% over the last two years to $1.43 billion for the third quarter of 2019. Subscribers in EMEA stood at 47.4 million as of the end of Q3, up 105% versus two years prior.

In Latin America, streaming revenue increased 71% from the end of the third quarter of 2017 to $741 million the end of the third quarter of 2019. Membership in the period grew 61% over that timeframe to 29.4 million.

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Overall, Netflix’s regional disclosures show greater-than-expected Latin America penetration — and lower-than-expected penetration in Asia, although there’s opportunity for additional growth. The company’s nearly 30 million paid subscribers in Latin America as of the end of September represents close to 40% penetration of broadband homes after launching in the region 2011, per Morgan Stanley analyst Ben Swinburne. Meanwhile, in Asia-Pacific, Netflix’s nearly 15 million subscribers as of Q3 is less than 10% of addressable broadband homes roughly 4-5 years after launching in the region. The numbers show Netflix has achieved “mid-teens” broadband penetration in EMEA, largely consistent with expectations, according to Swinburne.

“We are encouraged by the strong subscriber growth in emerging markets like Latin America years after first entering the market,” Swinburne wrote in a research note. “We acknowledge the risk that newer markets in Asia could be structurally more challenged and prove more difficult to penetrate, but we see meaningful opportunity for subscriber growth ahead.”

The U.S. and Canada, where Netflix has offered streaming the longest out of any region the world, remain its biggest markets. It had $2.62 billion in revenue for U.S./Canada in Q3 2019, an increase of 57% from the same period two years prior. Netflix had 67.1 million subs in the U.S. and Canada as of the end of September, up 18% over two years.

Netflix reported 60.62 million U.S. paid streaming members as of the end of Q3, meaning it had about 6.5 million in Canada at the end of the period.

Netflix also revealed average monthly revenue for paid streaming subscribers — with the U.S. and Canada highest at $13.08 for Q3 (+32% compared with two years earlier), followed by EMEA at $10.40 (+12%), Asia-Pacific at $9.29 (+2%) and LatAm at $8.63 (+5%).

Previously, Netflix has reported streaming results for the U.S. and lumped international results into one segment.

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