Netflix Misses On Revenue, Beats EPS, Free Subscriber Number Surges, $96 Million Cash Generated From NWC Change
Highlights from Netflix' earnings release:
- Subscribers – 20.01 million
- Net Subscriber Additions – 3.08 million
- Revenue – $596 million, miss estimte by $1 MM
- Operating Income – $78 million
- Net Income – $47 million
- EPS – $0.87 per diluted share, consensus of $0.77
- Total subscribers: 20.01MM from 16.933MM Q/Q
- Paid subscribers increased by 2.4MM, from 15.863MM to 18.268MM
- Cancellations per month increase to 857K from 723K Q/Q
- Bust most importantly, free subscribers surged from 1.070MM to 1.742MM. These are people who are not paying.
Table from the earnings release:
We are going through the earnings release right now but we would caution investors to be very careful with the free cash flow number: it appears the bulk of it comes from net working capital extraction.
Update: as expected, Net Working Capital provided roughly $100 million in "cash." If cash contributed from NWC had come in line with Q3, the company's Non-GAAP FCF would have been ($45) million, a drop of $50 million from Q3.
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