Personally, I’m pleased with the new NFLX report. I don’t think NFLX was as affected by the other streaming services as they thought they would be. I also think it shows the possibilities of international growth for Netflix in the future. Just today, we got an announcement that there is going to be a Witcher anime series.
The report overall was extremely good:
Quarter to Quarter growth is 333%! Wow, an incredible number there. Revenue is also up 30%. EPS 1.30 vs. .30 last year quarter over quarter. All of those look great. They also had a 24% reduction in their cash flow burn, while negative cash flow is not a great thing, at least seeing a reduction in it is. 8.8 million new subscribers vs. 7.9 expected. 167 million paid subscribers worldwide.
However, let’s look at the weak spots of the earnings report:
1)Changing the way they count viewership-It’s kind of lame they are counting anything more than 2 minutes as a view of that show. Now I don’t think this creates a hazard for NFLX but it’s just kind of lame to change it. Let’s be consistent here guys
2)Domestic Subscribers are forecasted to be down. 550K vs 589K expected this quarter. I’m not THAT surprised. There are already so many people with NFLX, you can only add so much of the population before it starts to slow down. This is why they are concentrating on INTERNATIONAL GROWTH and this is why I’m still bullish on NFLX.
The stock finished down 4% at one point, that’s when I took the opportunity to buy a little more. I look forward to owning this one for many years.
I’ll finish by saying this-the P/E ratio came down a little bit today 😉