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Netflix Touts Stock Buybacks as Cash Flow Problems Nearing End

Stock MarketsJan 19, 2021 04:27PM ET
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© Reuters. Netflix Earnings Miss, Revenue Beats In Q4

By Yasin Ebrahim

Investing.com - Netflix (NASDAQ:NFLX) said Tuesday it expects to be cash-flow neutral this year after reporting fourth quarter earnings that missed analysts' forecasts, but paid subscribers markedly topped expectations.

Netflix shares gained more than 10% in after-hours trade following the report.

Netflix announced earnings per share of $1.19 on revenue of $6.64B. Analysts polled by Investing.com anticipated EPS of $1.35 on revenue of $6.62B.

The company reported net adds of 8.51 million to 203.7 million, well above guidance of 6 million.

In a sign that the streaming giant's cash burn is under control after years of scrutiny, Netflix said it expected to be cash-flow neutral this year and in every subsequent year. "[W]e believe we no longer have a need to raise external financing for our day-to-day operations..." and are "very close to being sustainably FCF positive," the company said.

For the full year 2021, Netflix currently anticipated free cash flow will be around break even, compared with its prior expectation for -$1 billion to break even. 

The company also touted stock buyback ahead. 

"As we generate excess cash, we intend to maintain $10B-15B in gross debt and will explore returning cash to shareholders through ongoing stock buybacks, as we did in the past (2007-2011)." 

 

Netflix Touts Stock Buybacks as Cash Flow Problems Nearing End
 

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Kevin Shaughnessy
Kevin Shaughnessy Jan 20, 2021 11:07AM ET
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Debt duration? Potential victim of hgher rates?
 
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