Netflix adds 8.5 million net new subscribers in the fiscal fourth quarter

Written by: Wajeeh Khan
January 19, 2021
  • Netflix Inc. adds 8.5 million net new subscribers in the fiscal fourth quarter.
  • The streaming service reports £4.87 billion of revenue and 87 pence of EPS.
  • The Los Gatos-based firm gained roughly 65% in the stock market last year.

Netflix Inc. (NASDAQ: NFLX) said on Tuesday that 8.5 million new subscribers signed-up for its streaming service in the fiscal fourth quarter – taking the total to over 200 million for the 1st time in history. As per the Los Gatos-based company, new sign-ups from the United States and Canada continued to pour in despite higher prices in Q4.  

Netflix shares jumped close to 13% in after-hours trading on Tuesday. Including the price action, the stock is now trading at £414.36 per share. In comparison, it had tumbled to as low as £219.26 per share in March 2020.

Netflix Q4 financial results versus analysts’ estimates

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Netflix reported £397.67 million of net earnings in the fourth quarter that translate to 87 pence per share versus the year-ago figure of a higher 95 pence per share. The production firm recorded £4.87 billion of revenue in Q4. In the comparable quarter of lasts year, its revenue was capped at a lower £4.01 billion.

According to FactSet, experts had forecast the company to register £4.84 billion of revenue in the recent quarter. Their estimate for per-share earnings stood at £1.0. In the prior quarter (Q3), Netflix had added 2.2 million net new subscribers, as per the report published in October.

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Netflix executives’ comments in a letter to shareholders

In a letter to shareholders, Netflix executives also said on Tuesday that the company was close to hitting the milestone of sustainable free cash flow.

“We believe we are very close to being sustainably free cash flow positive. For the full year 2021, we currently anticipate free cash flow will be around break-even versus our prior expectation of -£730 million to break even. Combined with our £6.02 billion cash balance and our £550.28 million undrawn credit facility, we believe we no longer have a need to raise external financing for our day-to-day operations.”

In an announcement last week, Netflix said that it will release 70 original movies in 2021 to capitalise on the Coronavirus pandemic that still has movie theatres in limbo. The COVID-19 crisis has so far infected more than 24 million people in the United States and caused over 400 thousand deaths.

Netflix performed largely upbeat in the stock market last year with an annual gain of roughly 65%. At the time of writing, it is valued at £162.65 billion and has a price to earnings ratio of 81.06.