Netflix Subscribers Soar to 200 Million. What Promotes This Big Move?
After $Netflix(NFLX.US$ 2020 Q4 earnings conference call, the stock price skyrocketed and the number of subscribers also increased rapidly. Come and see what happened in the 2020 Q4 earnings call. ![]()
This article is a script from the Q&A session of Netflix's earnings call on January 19. In order to facilitate reading, we have made appropriate cuts. If you want to know more details, you can click the link provided by @moo_Live below to re-watch the earnings call.![]()
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Q: Could you talk about the underlying trends in some of these markets and what you’re seeing and which is driving some of these trends？
A: I think the story is pretty similar throughout the world. The types of content that our members are viewing is kind of similar pre-COVID, and post-COVID, obviously, we have more and more variety of content and great experiences that we’re offering to our members. We’re seeing growth everywhere, like Latin America, one of our more mature markets. As you mentioned in the kind of US, UCAN market, we’re roughly 60% penetrated and we’re still growing. So, we think we’ve got a lot of headroom in all these markets and we’re just trying to get a little better every day.![]()
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Q: When you think about Disney coming in or all these new launches, does that in some way provide an opportunity to try new distribution avenues or accelerated growth?
A: I think the first bit is just even that big impetus to move is, to some degree, a tailwind for us because we have more and more consumers who are around the world who are aware of the services. We are seeking to be innovative and constantly pushing the edges around how we can accelerate our growth, how we can improve our distribution footprint, how do we access members more and more. And also — and what’s really the key engine of our growth is just how do we satisfy those folks that have signed up for us. So, we’ll keep pushing the edges. We seek to be innovative in that way and we’ll come up with many creative ideas we can to grow.![]()
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Q: Could you talk about the underlying trends in some of these markets and what you’re seeing and which is driving some of these trends？
A: I think the story is pretty similar throughout the world. The types of content that our members are viewing is kind of similar pre-COVID, and post-COVID, obviously, we have more and more variety of content and great experiences that we’re offering to our members. We’re seeing growth everywhere, like Latin America, one of our more mature markets. As you mentioned in the kind of US, UCAN market, we’re roughly 60% penetrated and we’re still growing. So, we think we’ve got a lot of headroom in all these markets and we’re just trying to get a little better every day.
Q: When you think about Disney coming in or all these new launches, does that in some way provide an opportunity to try new distribution avenues or accelerated growth?
A: I think the first bit is just even that big impetus to move is, to some degree, a tailwind for us because we have more and more consumers who are around the world who are aware of the services. We are seeking to be innovative and constantly pushing the edges around how we can accelerate our growth, how we can improve our distribution footprint, how do we access members more and more. And also — and what’s really the key engine of our growth is just how do we satisfy those folks that have signed up for us. So, we’ll keep pushing the edges. We seek to be innovative in that way and we’ll come up with many creative ideas we can to grow.
Q: Can you talk about capital allocation and using the cash for buybacks versus potentially other opportunities?
A: To the point of our capital allocation approach, the philosophy remains unchanged, which is that we’re going to be disciplined stewards of the capital and try to do things that we believe are value maximizing for our shareholders. But we have turned this corner, where now we can, as we talked about with $8 billion of cash on the balance sheet, projecting to be cash flow about breakeven in 2021 and then positive thereafter. We want to return excess cash to our shareholders. So, we won’t build up a bunch of excess cash. We’ll maintain, as you say about, as we said in the letter and as you mentioned about $10 billion to $15 billion of gross debt on the balance sheet. And then beyond, as I say, we put a premium on balance sheet flexibility.
Can Netflix win the war of streaming media? Leave your thoughts in the comments!![]()
A: To the point of our capital allocation approach, the philosophy remains unchanged, which is that we’re going to be disciplined stewards of the capital and try to do things that we believe are value maximizing for our shareholders. But we have turned this corner, where now we can, as we talked about with $8 billion of cash on the balance sheet, projecting to be cash flow about breakeven in 2021 and then positive thereafter. We want to return excess cash to our shareholders. So, we won’t build up a bunch of excess cash. We’ll maintain, as you say about, as we said in the letter and as you mentioned about $10 billion to $15 billion of gross debt on the balance sheet. And then beyond, as I say, we put a premium on balance sheet flexibility.
Can Netflix win the war of streaming media? Leave your thoughts in the comments!
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