On Wednesday, Shares of Netflix, Inc. (NASDAQ: NFLX) showed the bullish trend with a higher momentum of 1.64% and ended its trading session at $254.39. The company traded total volume of 10,056,262 shares as contrast to its average volume of 6.71M shares. The company has a market value of $108.25B and about 432.48M shares outstanding. During the 52-week trading session, the minimum price at which share price traded was registered at $137.03 and reached the max level of $258.94.
Netflix stated better-than-expected financial results.
Earnings Highlights and Summary:
For the quarter ended December 31, 2017, Netflix’s revenue surged 32.6% to $3.29B contrast to $2.48B in Q4 2016. The Company’s revenue numbers exceeded analysts’ estimates of $3.28B.
During Q4 2017, Netflix’s average paid streaming memberships rose 25% on a y-o-y basis. The Company’s global streaming revenue amounted to $3.18B, up 35% contrast to $2.350B in the year ago same period. Netflix’s US streaming revenue totaled $1.63B in Q4 2017 contrast to $1.40B in Q4 2016, while International streaming revenue came in at $1.55B in the stated quarter as compared to $948.0M in the year earlier comparable quarter.
For Q4 2017, Netflix’s operating income was $245.0M, with an operating margin of 7.5%, contrast to an operating income of $154.0M, with an operating margin of 6.2%, in Q4 2016.
In the full fiscal year 2017, Netflix’s streaming revenue surged 36% to about $11.30B on a y-o-y basis. The Company added 24.0M new memberships in 2017 contrast to 19.0M in 2016. In 2017, Netflix’s average streaming hours per membership grew 9% on a y-o-y basis.
For Q4 2017, Netflix stated a net income of $185.52M, or $0.41 per diluted share, contrast to earnings of $0.15 per diluted share in Q4 2016. The Company’s net income in the stated quarter included a pre-tax $26.0M non-cash unrealized loss from F/X remeasurement on Netflix’s Eurobond. The Company’s earnings were in-line with market estimates of $0.41 per share.
During Q4 2017, Netflix registered global net additions of 8.33M, the highest quarter in the Company’s history, and up 18% as compared to the year ago corresponding period’s record of 7.05M net additions. The stated numbers exceeded the Company’s forecasts of 6.30M net additions, mainly because of stronger than expected acquisitions fueled by Netflix’s original content slate and the ongoing global adoption of internet entertainment.
In the US, Netflix’s memberships rose by 2.00M in Q4 2017 contrast to forecasts of 1.25M, bringing total net additions to 5.30M in FY17. Domestic contribution profits increased 5% on a y-o-y basis, although contribution margin of 34.4% declined on a y-o-y basis because of marketing spend.
Internationally, Netflix’s added 6.36M memberships in Q4 2017 contrast to the guidance of 5.05M net additions, a new record for quarterly net additions in the International segment. With contribution profits of $227.0M and a contribution margin of 4.5% in 2017, the International segment delivered its first full year of positive contribution profit in the Company’s history.
Free Cash Flow and Capital Structure:
During Q4 2017, Netflix’s free cash flow (FCF) amounted to negative $524.0M, bringing full year 2017 FCF to negative $2.00B, at the lower end of the Company’s guidance range of negative $2.00B to negative $2.50B.
Netflix noted that it is growing faster than expected, which allows the Company to invest more in original content than at first planned. Netflix is forecasting FY 2018 FCF to be around negative $3.0B to $4.0B.
For Q1 2018, Netflix is forecasting global net additions of 6.35M, with 1.45M net additions expected in the US and 4.90M internationally. The Company is targeting a full year 2018 operating margin of 10%, up about 300 basis points y-o-y, as in the prior year. With greater than expected member growth, which is expected to result in more revenue, Netflix is planning to spend $7.50B – $8.00B on content on a P&L basis in 2018.
The Company offered net profit margin of 4.00% while its gross profit margin was 33.80%. ROE was recorded as 14.60% while beta factor was 0.78. The stock, as of recent close, has shown the weekly upbeat performance of 12.98% which was maintained at 30.39% in this year.