NFLX Briefing Summary
21-Apr-14 16:19 ET
Netflix beats by $0.04, reports revs in-line; guides Q2 EPS in-line
Reports Q1 (Mar) earnings of $0.86 per share, excluding non-recurring items,
$0.04 better than the Capital IQ Consensus Estimate of $0.82; revenues rose
24.0% year/year to $1.27 bln vs the $1.27 bln consensus.
o Co guidance for Q2 above consensus, sees EPS of $1.12, excluding
non-recurring items, vs. $0.99 Capital IQ Consensus Estimate.
o Q1 Performance vs Guidance
o Domestic Streaming
o Total Subscriptions: 35.67 mln, Guidance 35.67 mln
o Net Additions: 2.25 mln. Guidance 2.25 mln
o Revenue: $799 mln, Guidance $796 mln
o Contribution Profit: $174 mln, Guidance $796 mln
o International Streaming
o Total Subscriptions: 12.68 mln, Guidance 12.53 mln
o Revenue: $267 mln, Guidance $267 mln
o Contribtution Profit (Loss): ($35 mln), Guidance ($42 mln)
o Global
o Net Income (Loss): $53 mln, Guidance $48 mln
o EPS: $0.86, Guidance $0.78
o Netflix Q2 Guidance
o Domestic Streaming
o Total Subscriptions: Guidance 36.19 mln
o Revenue: Guidance $835 mln
o Contribution Profit: Guidance $223 mln
o International Streaming
o Total Subscriptions: Guidance 13.62 mln.
o Revenue: Guidance $304 mln
o Contribution Profit (Loss): Guidance ($12 mln)
o Global
o Net Income (Loss): Guidance $69 mln
o EPS: Guidance $1.12
o Excerpts from Letter:
o Net additions: 'Our net additions for Q1 were 0.22 million more than prior
year Q1. As we've discussed previously, U.S. net additions in Q2 will
generally be lower than in the prior year Q2, even in a year with full year
growth, due to increased seasonality. This Q2, we expect our domestic net
additions to be about 0.11 million below the prior year Q2'.
o International: Due to rapid growth in our international segment we aren't
experiencing the same level of seasonality as in the U.S., and we anticipate
over 50% y/y growth in Q2 net additions despite slight headwinds from the
World Cup...Our present international segment is on a path to achieve
profitability this year'.
o Free Cash Flow: 'With further international expansion in the second half of
this year reducing net income, we expect free cash flow in Q4 to also be
reduced'.
o Price Changes: 'As expected, we saw limited impact from our January price
increase for new members in Ireland (from €6.99 to €7.99), which included
grandfathering all existing members at €6.99 for two years. In the U.S. we
have greatly improved our content selection since we introduced our
streaming plan in 2010 at $7.99 per month. Our current view is to do a one
or two dollar increase, depending on the country, later this quarter for new
members only. Existing members would stay at current pricing (e.g. $7.99 in
the U.S.) for a generous time period. These changes will enable us to
acquire more content and deliver an even better streaming experience.' |
