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  1. #1
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    [EN] Netflix's first-quarter subscriber additions misses estimates

    @DanRayburn: Netflix's streaming content obligations are now $15.3B, up from 25% last year. And yet it seems no one on Wall Street cares or is worried.

    Lisa Richwine and Narottam Medhora
    Apr 17, 2017

    Streaming video pioneer Netflix Inc ended the first quarter with fewer customers than Wall Street expected but issued a bullish forecast on the number of new subscribers it expects by mid-year, in a positive sign for its big international expansion.

    The company pushed back the next season of its defining hit, "House of Cards," and other programing to the second quarter, which should boost the number of new subscribers in that period, Netflix said.

    It added just under 5 million subscribers globally in the first quarter and expects 3.2 million more in the seasonally slow second quarter. Analysts had forecast nearly 2.4 million for the second quarter, according to FactSet.

    Netflix shares, which typically swing wildly after earnings reports, dropped as much as 3 percent in after-hours trading before rebounding to gain 1.3 percent.

    The company, which shook up Hollywood with its monthly, on-demand streaming service, said it expects to top 100 million global customers this weekend, and the after-hours share move put it on track to open at a record high.

    Netflix has expanded around the world over the last few years, betting that its U.S. formula would pay off in other countries. Opening in new markets and creating shows in additional languages was an expensive proposition.

    Netflix earnings per share in the first quarter beat Wall Street targets due to the change in timing of "House of Cards," which pushed costs into the second quarter, boosting operating margins from January through March and reducing them in the second quarter.

    "We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV," the company said in its quarterly letter to shareholders.

    For the quarter that ended March 31, Netflix added 3.53 million subscribers outside the United States. (

    Analysts on average had estimated 3.68 million additions, according to research firm FactSet StreetAccount.

    In the United States, the company added 1.42 million subscribers, compared with analysts' average estimate of 1.50 million.

    The Los Gatos, California-based company said revenue rose 34.7 percent to $2.64 billion in the quarter.

    Net income rose to $178 million, or 40 cents per share, from $28 million, or 6 cents per share.

    Netflix said it expects to add 600,000 subscribers in the United States in the current quarter, above the FactSet estimate of 364,000.

    In international markets, Netflix expects to add 2.60 million subscribers, above the average estimate of 2.09 million.

    Up to Monday's close, Netflix's stock had risen nearly 19 percent in 2017, outperforming the roughly 5 percent gain in the broader S&P 500 index.

    (Reporting by Narottam Medhora in Bengaluru; Editing by Savio D'Souza and Peter Henderson)

  2. #2
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Netflix nears 100M subscribers despite slower-than-expected growth

    Shares fell 3 per cent in after-hours trading in New York.

    Shannon Bond

    Netflix will reach 100M subscribers by this weekend, the streaming video company said, even as it reported slower-than-expected subscriber growth in the first quarter of 2017.

    Shares fell 3 per cent in after-hours trading in New York. Netflix stock has gained 55 per cent from a year ago when the company first said it would cross the 100M subscriber mark “some time” in 2017, boosted by an ambitious expansion to 130 new countries.

    The company added 4.95M members in the first three months of the year, fewer than the 5.2M it had forecast. Additions were slower than expected in both the US, where 1.42M new subscribers signed up, and internationally, with 3.53M new members.

    The slower subscriber growth was in part due to the mix of new shows in the quarter, said chief executive Reed Hastings. For example, House of Cards, which last year debuted in the first quarter, has been pushed into the second quarter this year.

    In the first half the year, Netflix expects to add 8.15M net new subscribers, compared with 8.42M in the same period in 2016.

    “We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV,” Mr Hastings said.

    Revenue rose to $2.63bn from $1.96bn a year ago, in line with analysts’ expectations of $2.6bn, according to estimates from S&P Global Market Intelligence.

    Net income rose to $178.2M, or 40 cents a share, from $27.7M, or 6 cents a share, a year ago. The company had forecast earnings of 37 cents a share.

  3. #3
    WHT-BR Top Member
    Data de Ingresso
    Dec 2010

    Content obligations

    Anita Balakrishnan
    Apr 17, 2017


    The California-based company is now dumping cash into original content to maintain its dominance over its growing field of rivals. The company's had $423 million negative free cash flow during the quarter, wider than the $261 million negative free cash flow a year ago. Netflix expects to have $2 billion in negative free cash flow this year.

    Netflix said in the fall that it plans to spend $6 billion on content this year, above last year's predicted spending from companies like Amazon and CBS. Netflix also said in January it plans to produce 1,000 hours of premium original content this year — even as tech giants like Apple try their hand at original shows.

    Still, the company's cash burn has been a concern for some on Wall Street. The company is spending over $1 billion in 2017 just on marketing, and streaming content obligations have swollen to $15.3 billion, up from $12.3 billion a year ago.

    "We continue to believe that Netflix cash burn is important and is largely overlooked by investors," Wedbush analyst Michael Pachter said in a note ahead of the earnings release.


    As of last year, Netflix was by far the most-watched streaming service in America, at 52.6 million American households, according to Nielsen data obtained by CNBC. By comparison, Amazon had about 25.2 million homes, Nielsen estimated.

    Netflix Content Obligations Balloon to $12.3 Billion

    Todd Spangler
    April 20, 2016

    Netflix keeps pumping more dollars into global licensing and production deals — and the company has increased its bet that continued subscriber growth will keep pace to pay for its long-term content contracts.

    The subscription VOD leader’s content obligations soared to $12.3 billion as of the end of the first quarter of 2016, up 26% from a year earlier, and up from $10.9 billion in the previous quarter. Of note, $5.16 billion of those content obligations as of March 31 are due in less than one year, according to Netflix’s 10-Q quarterly filing Wednesday. That’s up more than $1 billion from a year earlier.

    The Q1 jump in the company’s content obligations — payments for licensed or produced programming over a period of several years — was due to Netflix’s global launch, according to CFO David Wells. The company in January expanded service to 130 new countries to reach more than 190 territories, and now has 81.5 million users around the globe.

    Worldwide, Netflix’s overall content obligations in the first quarter of 2016 were about $151 per subscriber, up from $145 in the fourth quarter of 2015 but down from $157 for Q1 of 2015. Under Netflix’s content deals, once a title becomes available on the service a content liability is generally recorded on its balance sheet.

    But that’s not the whole story. The content obligation figures that Netflix discloses don’t include what it says could be “significant” payments for future titles that are not yet determinable. Those include traditional film output deals, like the U.S. output deal with Disney that kicks in starting this fall, as well as certain TV series license agreements where the number of seasons to be aired is unknown.

    The tab for those “unknown” titles? It could amount to $3 billion to $5 billion over the next three years, Netflix disclosed in its 2015 annual filing in January.

    Netflix said its higher spending on content budget will be fueled by higher subscriber fees. Starting in May, Netflix’s U.S. members who currently pay either $7.99 or $8.99 per month for the HD two-*screen plan will be rolled up to the $9.99 monthly tier. Thanks to that expected increase in revenue per sub, the company is projecting content spending to rise from $5 billion in 2016 to more than $6 billion in 2017 on a profit/loss basis.

    What spooked investors this week was that Netflix projected adding 500,000 U.S. subs and 2 million internationally for the second quarter of 2016, below analyst estimates of 600,000 in the U.S. and 2.9 million overseas.

    The company said it expects “modestly increased churn” with the price increases. It better hope so: Netflix is banking on the fact that it won’t lose a big number of users — and in fact will keep bringing in more new ones — because if that growth stalls, it won’t have the cash in years ahead when its hefty content bills come due.

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