Netflix beats by $0.04, reports revs in-line with U.S. subs below guidance and international subs slightly above; guides Q4 subs, EPS and revs below consensus  (286.28 +2.03)

• Reports Q3 (Sep) earnings of $1.09 per share, $0.04 better thanthe S&P Capital IQ Consensus of $1.05; revenues rose 31.2% year/year to $5.25 bln vs the $5.25 bln S&P Capital IQ Consensus. 
• Total paid net adds of 6.8m increased 12% year over year and was an all-time Q3 record. Operating margin of 18.7% (up 670 bps year over year) was above guidance due to timing of content and marketing spend, which will be more weighted to Q4'19.
• In the US, paid net adds totaled 0.5m in Q3 vs. our 0.8m forecast, and year to date paid net adds are 2.1m vs. 4.1m in the first nine months of 2018. Since our US price increase earlier this year, retention has not yet fully returned on a sustained basis to pre-price-change levels, which has led to slower US membership growth. revenue growth has been accelerating as US ARPU increased 16.5% year over year in Q3.
• International paid net additions totaled 6.3m in Q3, a 23% increase vs. 5.1m in the year ago quarter, and slightly above our 6.2m guidance forecast. The US dollar strengthened vs. several key currencies over the course of the quarter, which resulted in the variance between our forecasted vs. actual international revenue. International ARPU, excluding the impact of F/X, rose 10% year over year. We're making strides in our key markets and, while we have much more work to do in Asia in the coming years, we are seeing encouraging signs of progress.
• Co issues downside guidance for Q4, sees EPS of $0.51 vs. $0.85 S&P Capital IQ Consensus; sees Q4 revs of $5.442 bln vs. $5.51 bln S&P Capital IQ Consensus.
• For Q4, we're expecting consolidated revenue to increase 30% year over year with 9% streaming ARPU growth. We're forecasting 7.6m global paid net adds (vs. 9.5 mln estimates and 8.8m last Q4), with 0.6m in the US and 7.0m for the international segment. This implies full year 2019 paid net adds of 26.7m, down from 28.6m last year. While we had previously expected 2019 paid net adds to be up year over year, our current forecast reflects several factors including less precision in our ability to forecast the impact of our Q4 content slate, which consists of several new big IP launches (as opposed to returning seasons), the minor elevated churn in response to some price changes, and new forthcoming competition.
• Our long term outlook on our business is unchanged. We're on track to achieve our full year 2019 operating margin goal of 13%. In 2020, we'll be targeting another 300 basis points in operating margin expansion, consistent with the annual margin improvement we've delivered each year since 2017.
• Competition: There may be some modest headwind to our near-term growth, and we have tried to factor that into our guidance. In the long-term, though, we expect we'll continue to grow nicely given the strength of our service and the large market opportunity.
• For the full year 2019, we're still expecting FCF of ~-$3.5 billion. With our quickly growing revenue base and expanding operating margins, we will be able to fund more of our content spending internally. As a result, we're expecting free cash flow to improve in 2020 vs. 2019 and we expect to continue to improve annually beyond 2020.
• Starting with our Q4'19 earnings report in January 2020, we plan to disclose revenue and membership by region
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