Netflix reported that its paid streaming subscribers rose to 203.7 million at the end of the fourth quarter, up 23% from a year ago.
Fourth quarter net income fell to $542 million, or $1.19 a share, from $587 million or $1.30 a share, a year ago. Wall Street had been expecting earnings per share to show an increase.
The company said the drop in earnings was the result of a $258 million non-cash unrealized loss from foreign exchange remeasurement.
Revenue rose 21% to $6.64 billion.
Netflix said its subscriber growth--a gain of 8.51 million--and revenue figures were above guidance. They were also above Wall Street estimates. Netflix shares moved up in after-market trading.
The company also said that next year, it might not have to rely on outside financing for its day-to-day operations. The company also teased that it might have “exciting news” about Shonda Rhimes' new series Bridgerton.
For the first quarter, Netflix said it expects 6 million subscribers. In the first quarter of 2020, Netflix added 15.8 million subscribers, in part due to the COVID-19 lockdowns.
The company said it had negative cash flow of $138 million, down from $1.5 billion a year ago. For the full year, negative cash flow was $1.9 billion, down from $3.3 billion in 2019.
“We believe we are very close to being sustainably FCF positive,” Netflix said in its letter to shareholders. “For the full year 2021, we currently anticipate free cash flow will be around break even (vs. our prior expectation for negative $1 billion to break even). Combined with our $8.2 billion cash balance and our $750 million undrawn credit facility, we believe we no longer have a need to raise external financing for our day-to-day operations.”
Netflix said the new season of The Crown drew more than 100 million households in its first 28 days, exceeding the total for its prior seasons.
The Midnight Sky, starring and directed by George Clooney was Netflix’s biggest movie in the quarter with 72 million households watching in its first four weeks. The film Over the Moon attracted 43 million member households and Netflix projected that We Can Be Heroes will reach 53 million households in its first four weeks.
Netflix said it continues to tinker with its interface, making it easier for subscribers to find content. "We’ve been testing a new feature that gives members the ability to choose to instantly watch a title chosen just for them versus browse," the company said. "The response has been positive and we plan to roll it out globally in the first half of 2021."
In its subscriber letter, Netflix noted that 2020 saw many major media companies enter the streaming arena.
"This signifies that these companies all recognize the future is streaming entertainment, a vision we have been working towards since inception," Netflix said.
"Our strategy is simple: if we can continue to improve Netflix every day to better delight our members, we can be their first choice for streaming entertainment. This past year is a testament to this approach. Disney Plus had a massive first year (87 million paid subscribers!) and we recorded the biggest year of paid membership growth in our history," the company said.
Jon has been business editor of Broadcasting+Cable since 2010. He focuses on revenue-generating activities, including advertising and distribution, as well as executive intrigue and merger and acquisition activity. Just about any story is fair game, if a dollar sign can make its way into the article. Before B+C, Jon covered the industry for TVWeek, Cable World, Electronic Media, Advertising Age and The New York Post. A native New Yorker, Jon is hiding in plain sight in the suburbs of Chicago.
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