Netflix Was In Position To Soar During The Pandemic, And Their Earnings Report Tuesday Shows They Have!

Reed Hastings, left, CEO of Netflix, a global provider of streaming movies and TV series, and Ted Sarandos Chief Content Officer of Netflix, arrive at the premiere of the serie "Marseille", at the Pharo Palace, in Marseille, southern France , Wednesday, May 4, 2016. "Marseille" is the first TV series produced by Netflix in France. (AP Photo/Claude Paris)

Add Netflix to the list of pandemic winners, as the streaming company announced fourth quarter earnings late Tuesday that cause their stock to jump 10% at the close of trading.

Highlights of their report include the fact they are “very close” to being free cash flow positive and expects to be around the break even point this year on cash flow.  That would be very big news for Netflix, as they said it will no longer require them to seek external financing going forward, and they would even explore returning cash to shareholders.

The company also announced that it intends to pay down more debt in 2021 too. Their books indicate they’ve raised $15 billion in debt since 2011 and they currently are sitting on $8.2 billion in cash on hand.

Other key details from their earnings call include a slight uptick in revenue from revenue expected ($6.64 billion vs $6.62 billion) and their paid net subscriptions grew at a higher rate than expected.  They signed 8.5 million new customers as opposed to the predicted 6.47 million.

The company has now topped the 200 million mark of subscribers worldwide, as signups actually went up significantly despite higher prices in the U.S. and Canada. “We believe we are very close to being sustainably [free-cash-flow] positive,” their executives wrote.  “For the full year 2021, we currently anticipate free cash flow will be around break even (vs. our prior expectation for -$1 billion to break even). Combined with our $8.2 billion cash balance and our $750 m undrawn credit facility, we believe we no longer have a need to raise external financing for our day-to-day operation,” the executives continued.

Over the past 12 months, Netflix stock is up over 47%.

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