Netflix's Biggest Surprise In Q2: Subscriber Growth In U.S. 50% Above Expectations

Netflix, Inc. NFLX reported impressive second quarter numbers on Wednesday afternoon, with subscribers base reaching an all-time high and surpassing the 65 million mark.

Cathie Wood, CEO & CIO of ARK Invest, was on CNBC to weigh in on Netflix's earnings.

Tipping Point

"What was very surprising about this quarter is the bigger surprise was in the United States," Wood said. "The subscriber growth was 50 percent above what people expected. So, roughly 900,000 versus 600,000. Internationally, there was a 25 percent upside surprise -- up 2.4 million versus 1.9 expected. So really, really strong growth, kind of a tipping point."

Related Link: A Bull, A Bear And Another Analyze Netflix's Earnings

Original Content: The Driver?

Wood was asked whether original content is solely driving Netflix's subscriber growth. She replied, "Well, I do think we are seeing broadcast and cable viewership falling and people really gravitating to the services that Netflix offers. Original content is about 10 percent of their offerings and it really is a big draw. We think that and Reed Hastings [Netflix CEO] has said their goal is to get that to 50 percent."

She continued, "And so, we are seeing they understand what consumers want to watch. They watch their viewing behavior and understand what works. And so, they are gearing their original content programming to that and the lineup is enormous. They're very prolific right now."

International Expansion

On whether investors are expecting too much from Netflix's international expansions, Wood said, "Well they're in 50 countries now and they expect to be in 200 by the end of 2016. We think that they've learned in Japan specifically from Hulu's mistakes, so they are treading carefully. They are guiding expectations to the low-end. We think they have learned from last year; last year their price was half what it is now."

Wood thinks Netflix's international penetration rates are going to be "much better than people expect."