RED ALERT IN USA =WHAT A SCAM "E' REPORTS SPINS VS REAL FINANCIAL FACTS??????LOOK AT THIS $51M+ NEGATIVE CASH FLOW
RED ALERT IN USA =WHAT A SCAM "E' REPORTS SPINS VS REAL FINANCIAL FACTS??????LOOK AT THIS $51M+ NEGATIVE CASH FLOW
AS DVD BY MAIL GETS KILLED NEXT THIS FRAUD WILL go pink sheets
FRAUD FRAUD PONZI BY ORGANIZED NEXUS SCAM GANG ..MASSIVE FRAUD MANIPUALTION SCAM CONTINUES WITH MASSIVE PRICE/VOLUME DISTORTION
HANG S.E.C. CRIMIAL WATCH PARASITES AND CRIMINAL MEDIA SHILLS PUMP FRAUD NETFLIX AND BASH APPLE?
International
During the quarter, we grew to over 6 million international members, as people around the world
discover the benefits of Netflix.
Our total international contribution loss of $105 million in Q4 was, as expected, higher than the prior
quarter international loss of $92 million, owing to the incremental costs associated with our launch in
the Nordic countries. The Q4 loss was lower, however, than our guidance midpoint of a $113 million
loss, due primarily to the higher than expected growth of international subscriptions and revenue.
Over the course of this year, we expect to see declining losses in our current international markets as
member growth exceeds growth in content spending. With a Q1 guidance midpoint of $87 million in
international losses, we expect a sequential improvement of $18 million, with more modest sequential
improvements expected in subsequent quarters.
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DVD
DVD memberships declined less than we had anticipated this quarter to 8.2 million (above the top end
of our guidance range), driven by stronger than forecasted retention. The decline has slowed in each
quarter since we introduced the DVD-only plan.
The domestic DVD segment delivered $128 million of contribution profit in Q4, representing a 50%
contribution margin, higher than anticipated due to higher members and lower than expected DVD
usage. We anticipate a decline in DVD contribution margin sequentially from Q4 to Q1 as usage
seasonally increases in Q1 and the expected USPS rate increase of $0.01 each way takes effect in
January.
The US Postal Service is under financial stress, but we don’t foresee service changes this year that have a
material negative impact upon us or our members.
Global Profitability: Q4 Results & Q1 Outlook
Consolidated Q4 net income of $8 million ($0.13 EPS) exceeded our guidance due to contribution profit
out-performance primarily in our domestic and international streaming segments. Net income was flat
quarter over quarter, as increased domestic streaming contribution profit (up $18 million) more than
offset a $3 million decline of DVD contribution profit, and a $12 million increase in international losses
(driven by the launch of the Nordics market), while global operating expenses were flat sequentially.
We anticipate net income will be relatively flat quarter over quarter in Q1, as improvements in both
domestic and international streaming profits will be offset by a decline in DVD contribution profit and
increases in global operating expenses.
Free Cash Flow & Capital
In Q4, the gap between free cash flow (negative $51 million) and net income (positive $8 million)
widened as a result of payments for the original programs coming to Netflix in 2013. Significant uses of
cash in the quarter (relative to net income) were cash payments for both originals and non-originals
content (in excess of the P&L expense), cash payments for PP&E (related to the continued rollout of our
Open Connect servers), and tax payments.
In the past, we have managed our content licensing agreements such that cash payments in any quarter
do not exceed 110% of the P&L expense (in other words, if our P&L expense was $200 million in the
quarter, our cash payments for content would not exceed $220 million in the quarter). As we shared on
our last earnings call, our original programming will require more up-front cash payments than most
other content licensing agreements, raising this ratio (of cash to P&L for content) to as high as 120% in
certain quarters with material originals payments. The bulk of our remaining cash payments for our
current originals will be in Q1, driving FCF materially more negative than Q4, and then FCF will improve
substantially in subsequent quarters.
As highlighted previously, we have sufficient cash on hand to fund our current slate of originals and
ongoing expenses, and to maintain an adequate reserve, before returning to positive FCF.
In addition, we are exploring taking advantage of the current low interest rate environment to refinance
our $200 million in outstanding notes and raise additional cash through new debt financing. This would
give us additional reserves as well as increased flexibility to fund future originals.
Sentiment: Strong Sell