Netflix Inc.

04/20/2021 | Press release | Distributed by Public on 04/20/2021 14:01

First Quarter Financial Statements

Income Statement

Netflix, Inc.
Consolidated Statements of Operations
(unaudited)
(in thousands, except per share data)
Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended Three Months Ended
March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, March 31,
2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2021
Revenues $ 4,520,992 $ 4,923,116 $ 5,244,905 $ 5,467,434 $ 20,156,447 $ 5,767,691 $ 6,148,286 $ 6,435,637 $ 6,644,442 $ 24,996,056 $ 7,163,282
Cost of revenues 2,870,614 3,005,657 3,097,919 3,466,023 12,440,213 3,599,701 3,643,707 3,867,751 4,165,160 15,276,319 3,868,511
Marketing 616,578 603,150 553,797 878,937 2,652,462 503,830 434,370 527,597 762,565 2,228,362 512,512
Technology and development 372,764 383,233 379,776 409,376 1,545,149 453,817 435,045 453,802 486,936 1,829,600 525,207
General and administrative 201,952 224,657 233,174 254,586 914,369 252,087 277,236 271,624 275,539 1,076,486 297,196
Operating income 459,084 706,419 980,239 458,512 2,604,254 958,256 1,357,928 1,314,863 954,242 4,585,289 1,959,856
Other income (expense):
Interest expense (135,529) (152,033) (160,660) (177,801) (626,023) (184,083) (189,151) (197,079) (197,186) (767,499) (194,440)
Interest and other income (expense) 76,104 (53,470) 192,744 (131,378) 84,000 21,697 (133,175) (256,324) (250,639) (618,441) 269,086
Income before income taxes 399,659 500,916 1,012,323 149,333 2,062,231 795,870 1,035,602 861,460 506,417 3,199,349 2,034,502
Benefit from (provision for) income taxes (55,607) (230,266) (347,079) 437,637 (195,315) (86,803) (315,406) (71,484) 35,739 (437,954) (327,787)
Net income $ 344,052 $ 270,650 $ 665,244 $ 586,970 $ 1,866,916 $ 709,067 $ 720,196 $ 789,976 $ 542,156 $ 2,761,395 $ 1,706,715
Earnings per share:
Basic $ 0.79 $ 0.62 $ 1.52 $ 1.34 $ 4.26 $ 1.61 $ 1.63 $ 1.79 $ 1.23 $ 6.26 $ 3.85
Diluted $ 0.76 $ 0.60 $ 1.47 $ 1.30 $ 4.13 $ 1.57 $ 1.59 $ 1.74 $ 1.19 $ 6.08 $ 3.75
Weighted-average common shares outstanding:
Basic 436,947 437,587 438,090 438,547 437,799 439,352 440,569 441,526 442,220 440,922 443,224
Diluted 451,922 452,195 451,552 451,367 451,765 452,494 453,945 455,088 455,283 454,208 455,641

Balance Sheet

Netflix, Inc.
Consolidated Balance Sheets
(unaudited)
(in thousands)
March 31, June 30, September 30, December 31, March 31, June 30, September 30, December 31, March 31,
2019 2019 2019 2019 2020 2020 2020 2020 2021
Assets
Current assets:
Cash and cash equivalents $ 3,348,557 $ 5,004,247 $ 4,435,018 $ 5,018,437 $ 5,151,884 $ 7,153,248 $ 8,392,391 $ 8,205,550 $ 8,403,705
Other current assets 820,350 872,910 892,740 1,160,067 1,295,897 1,410,891 1,434,089 1,556,030 1,703,803
Total current assets 4,168,907 5,877,157 5,327,758 6,178,504 6,447,781 8,564,139 9,826,480 9,761,580 10,107,508
Non-current content assets, net 20,878,317 21,937,845 23,227,772 24,504,567 25,266,889 25,155,117 25,067,633 25,383,950 26,043,991
Property and equipment, net 434,372 452,399 481,992 565,221 650,455 751,941 828,118 960,183 1,015,419
Other non-current assets 1,737,036 1,903,938 1,904,189 2,727,420 2,694,785 2,704,084 2,900,312 3,174,646 2,956,096
Total assets $ 27,218,632 $ 30,171,339 $ 30,941,711 $ 33,975,712 $ 35,059,910 $ 37,175,281 $ 38,622,543 $ 39,280,359 $ 40,123,014
Liabilities and Stockholders' Equity
Current liabilities:
Current content liabilities $ 4,858,899 $ 4,846,525 $ 4,857,520 $ 4,413,561 $ 4,761,585 $ 4,664,733 $ 4,599,654 $ 4,429,536 $ 4,297,957
Accounts payable 439,496 442,194 444,129 674,347 545,488 446,668 541,298 656,183 532,942
Accrued expenses and other liabilities 750,720 752,488 1,040,745 843,043 1,061,090 986,595 1,259,124 1,102,196 1,291,812
Deferred revenue 808,692 892,777 915,506 924,745 986,753 1,029,261 1,040,202 1,117,992 1,140,271
Short-term debt - 0 - 0 - 0 - 0 498,809 499,161 499,517 499,878 698,788
Total current liabilities 6,857,807 6,933,984 7,257,900 6,855,696 7,853,725 7,626,418 7,939,795 7,805,785 7,961,770
Non-current content liabilities 3,560,364 3,564,440 3,419,552 3,334,323 3,206,051 3,208,164 2,926,574 2,618,084 2,465,626
Long-term debt 10,305,023 12,594,135 12,425,746 14,759,260 14,170,692 15,294,998 15,547,616 15,809,095 14,860,552
Other non-current liabilities 792,380 973,232 977,008 1,444,276 1,420,148 1,710,948 1,875,235 1,982,155 1,950,986
Total liabilities 21,515,574 24,065,791 24,080,206 26,393,555 26,650,616 27,840,528 28,289,220 28,215,119 27,238,934
Stockholders' equity:
Common stock 2,439,773 2,566,365 2,677,972 2,793,929 2,935,532 3,127,813 3,303,482 3,447,698 3,600,084
Accumulated other comprehensive income (loss) (25,600) (20,352) (41,246) (23,521) (47,054) (34,072) (1,147) 44,398 4,137
Retained earnings 3,288,885 3,559,535 4,224,779 4,811,749 5,520,816 6,241,012 7,030,988 7,573,144 9,279,859
Total stockholders' equity 5,703,058 6,105,548 6,861,505 7,582,157 8,409,294 9,334,753 10,333,323 11,065,240 12,884,080
Total liabilities and stockholders' equity $ 27,218,632 $ 30,171,339 $ 30,941,711 $ 33,975,712 $ 35,059,910 $ 37,175,281 $ 38,622,543 $ 39,280,359 $ 40,123,014

Cashflow

Netflix, Inc.
Consolidated Statements of Cash Flows
(unaudited)
(in thousands)
Three Months Ended Twelve Months Ended Three Months Ended Twelve Months Ended Three Months Ended
March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, March 31,
2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2021
Cash flows from operating activities:
Net income $ 344,052 $ 270,650 $ 665,244 $ 586,970 $ 1,866,916 $ 709,067 $ 720,196 $ 789,976 $ 542,156 $ 2,761,395 $ 1,706,715
Adjustments to reconcile net income to net cash
provided by (used in) operating activities:
Additions to content assets (2,997,746) (3,325,103) (3,648,292) (3,945,542) (13,916,683) (3,294,275) (2,510,782) (2,653,886) (3,320,341) (11,779,284) (3,284,576)
Change in content liabilities (14,698) (12,414) (95,548) (571,351) (694,011) 258,945 (108,432) (379,458) (528,488) (757,433) (266,040)
Amortization of content assets 2,124,686 2,231,915 2,279,977 2,579,669 9,216,247 2,483,385 2,607,159 2,733,743 2,982,625 10,806,912 2,719,196
Depreciation and amortization of property, equipment and intangibles 23,561 25,496 26,704 27,818 103,579 28,517 26,661 28,589 31,943 115,710 35,741
Stock-based compensation expense 101,200 103,848 100,262 100,066 405,376 97,019 104,210 106,357 107,594 415,180 107,230
Foreign currency remeasurement loss (gain) on debt (57,600) 61,284 (171,360) 122,100 (45,576) (93,060) 119,161 249,194 257,983 533,278 (253,330)
Other non-cash items 45,708 60,695 57,934 63,893 228,230 65,448 70,301 83,851 73,526 293,126 72,657
Deferred income taxes 6,627 35,519 52,105 (188,694) (94,443) 46,619 223,308 (40,277) (159,584) 70,066 159,733
Changes in operating assets and liabilities:
Other current assets (32,076) (24,231) 145 (195,951) (252,113) (127,353) 3,066 (22,974) (40,362) (187,623) (221,555)
Accounts payable (124,467) (2,674) (7,643) 230,847 96,063 (149,153) (112,027) 111,677 107,898 (41,605) (137,313)
Accrued expenses and other liabilities 157,647 (26,705) 260,872 (234,036) 157,778 214,191 (105,450) 266,027 (176,585) 198,183 177,897
Deferred revenue 47,793 84,085 22,729 9,239 163,846 62,008 42,508 10,941 77,790 193,247 22,279
Other non-current assets and liabilities (4,486) (26,119) (44,923) (47,003) (122,531) (41,446) (38,803) (19,999) (93,827) (194,075) (61,368)
Net cash provided by (used in) operating activities (379,799) (543,754) (501,794) (1,461,975) (2,887,322) 259,912 1,041,076 1,263,761 (137,672) 2,427,077 777,266
Cash flows from investing activities:
Purchases of property and equipment (60,381) (39,584) (45,333) (107,737) (253,035) (98,015) (141,741) (109,811) (148,356) (497,923) (81,001)
Change in other assets (19,722) (10,452) (4,021) (99,834) (134,029) (288) (260) (8,840) 1,957 (7,431) (4,615)
Net cash used in investing activities (80,103) (50,036) (49,354) (207,571) (387,064) (98,303) (142,001) (118,651) (146,399) (505,354) (85,616)
Cash flows from financing activities:
Repayments of debt - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 - 0 (500,000)
Proceeds from issuance of debt - 0 2,243,196 - 0 2,226,110 4,469,306 - 0 1,009,464 - 0 - 0 1,009,464 - 0
Debt issuance costs - 0 (18,192) - 0 (17,942) (36,134) - 0 (7,559) - 0 - 0 (7,559) - 0
Proceeds from issuance of common stock 22,972 21,896 11,989 15,633 72,490 43,694 89,060 68,665 33,987 235,406 48,071
Net cash provided by (used in) financing activities 22,972 2,246,900 11,989 2,223,801 4,505,662 43,694 1,090,965 68,665 33,987 1,237,311 (451,929)
Effect of exchange rate changes on cash, cash equivalents, and restricted cash (5,014) 4,998 (29,325) 29,810 469 (70,902) 11,819 28,459 66,674 36,050 (42,138)
Net increase (decrease) in cash, cash equivalents, and restricted cash (441,944) 1,658,108 (568,484) 584,065 1,231,745 134,401 2,001,859 1,242,234 (183,410) 3,195,084 197,583
Cash, cash equivalents, and restricted cash beginning of period 3,812,041 3,370,097 5,028,205 4,459,721 3,812,041 5,043,786 5,178,187 7,180,046 8,422,280 5,043,786 8,238,870
Cash, cash equivalents, and restricted cash end of period $ 3,370,097 $ 5,028,205 $ 4,459,721 $ 5,043,786 $ 5,043,786 $ 5,178,187 $ 7,180,046 $ 8,422,280 $ 8,238,870 $ 8,238,870 $ 8,436,453
Non-GAAP free cash flow reconciliation:
Net cash provided by (used in) operating activities $ (379,799) $ (543,754) $ (501,794) $ (1,461,975) $ (2,887,322) $ 259,912 $ 1,041,076 $ 1,263,761 $ (137,672) $ 2,427,077 $ 777,266
Purchases of property and equipment (60,381) (39,584) (45,333) (107,737) (253,035) (98,015) (141,741) (109,811) (148,356) (497,923) (81,001)
Change in other assets (19,722) (10,452) (4,021) (99,834) (134,029) (288) (260) (8,840) 1,957 (7,431) (4,615)
Non-GAAP free cash flow $ (459,902) $ (593,790) $ (551,148) $ (1,669,546) $ (3,274,386) $ 161,609 $ 899,075 $ 1,145,110 $ (284,071) $ 1,921,723 $ 691,650

Regional Information

Netflix, Inc.
Streaming Revenue and Membership Information by Region
(unaudited)
(in thousands, except for average revenue per membership and percentages)
As of / Three Months Ended As of / Year Ended As of / Three Months Ended As of / Year Ended As of / Three Months Ended
March 31, June 30, September 30, December 31, December 31, March 31, June 30, September 30, December 31, December 31, March 31,
2019 2019 2019 2019 2019 2020 2020 2020 2020 2020 2021
United States and Canada (UCAN)
Revenues (1) $ 2,256,851 $ 2,501,199 $ 2,621,250 $ 2,671,908 $ 10,051,208 $ 2,702,776 $ 2,839,670 $ 2,933,445 $ 2,979,505 $ 11,455,396 $ 3,170,972
Paid net membership additions (losses) 1,876 (132) 613 548 2,905 2,307 2,935 177 855 6,274 448
Paid memberships at end of period 66,633 66,501 67,114 67,662 67,662 69,969 72,904 73,081 73,936 73,936 74,384
Average paying memberships 65,695 66,567 66,808 67,388 66,615 68,816 71,437 72,993 73,509 71,689 74,160
Average revenue per membership $11.45 $12.52 $13.08 $13.22 $12.57 $13.09 $13.25 $13.40 $13.51 $13.32 $14.25
% change as compared to prior-year period 4% 12% 17% 17% 13% 14% 6% 2% 2% 6% 9%
Constant currency % change as compared to prior-year period* 4% 13% 17% 17% 13% 14% 6% 3% 2% 6% 9%
Europe, Middle East and Africa (EMEA)
Revenues $ 1,233,379 $ 1,319,087 $ 1,428,040 $ 1,562,561 $ 5,543,067 $ 1,723,474 $ 1,892,537 $ 2,019,083 $ 2,137,158 $ 7,772,252 $ 2,343,674
Paid net membership additions 4,724 1,687 3,126 4,423 13,960 6,956 2,749 759 4,456 14,920 1,810
Paid memberships at end of period 42,542 44,229 47,355 51,778 51,778 58,734 61,483 62,242 66,698 66,698 68,508
Average paying memberships 40,180 43,386 45,792 49,567 44,731 55,256 60,109 61,863 64,470 60,425 67,603
Average revenue per membership $10.23 $10.13 $10.40 $10.51 $10.33 $10.40 $10.50 $10.88 $11.05 $10.72 $11.56
% change as compared to prior-year period -4% -6% 1% 3% -1% 2% 4% 5% 5% 4% 11%
Constant currency % change as compared to prior-year period* 2% 3% 6% 7% 4% 4% 8% 3% 0% 3% 4%
Latin America (LATAM)
Revenues $ 630,472 $ 677,136 $ 741,434 $ 746,392 $ 2,795,434 $ 793,453 $ 785,368 $ 789,384 $ 788,522 $ 3,156,727 $ 836,647
Paid net membership additions 1,470 343 1,490 2,037 5,340 2,901 1,750 256 1,213 6,120 357
Paid memberships at end of period 27,547 27,890 29,380 31,417 31,417 34,318 36,068 36,324 37,537 37,537 37,894
Average paying memberships 26,812 27,719 28,635 30,399 28,391 32,868 35,193 36,196 36,931 35,297 37,716
Average revenue per membership $7.84 $8.14 $8.63 $8.18 $8.21 $8.05 $7.44 $7.27 $7.12 $7.45 $7.39
% change as compared to prior-year period -11% -5% 8% 9% 0% 3% -9% -16% -13% -9% -8%
Constant currency % change as compared to prior-year period* 7% 12% 17% 18% 13% 12% 13% 5% 4% 8% 5%
Asia-Pacific (APAC)
Revenues $ 319,602 $ 349,494 $ 382,304 $ 418,121 $ 1,469,521 $ 483,660 $ 569,140 $ 634,891 $ 684,609 $ 2,372,300 $ 762,414
Paid net membership additions 1,534 801 1,543 1,748 5,626 3,602 2,657 1,012 1,988 9,259 1,361
Paid memberships at end of period 12,141 12,942 14,485 16,233 16,233 19,835 22,492 23,504 25,492 25,492 26,853
Average paying memberships 11,374 12,542 13,714 15,359 13,247 18,034 21,164 22,998 24,498 21,674 26,173
Average revenue per membership $9.37 $9.29 $9.29 $9.07 $9.24 $8.94 $8.96 $9.20 $9.32 $9.12 $9.71
% change as compared to prior-year period -2% -1% 0% -1% -1% -5% -4% -1% 3% -1% 9%
Constant currency % change as compared to prior-year period* 3% 5% 3% 0% 3% -3% 1% -1% 0% -1% 3%
(1) Excludes DVD revenues of $297 million, $239 million, and $50 million for the years ended December 31, 2019, 2020, and the three months ended March 31, 2021, respectively. Total US revenues for the years ended December 31, 2019, 2020, and the three months ended March 31, 2021 were $9.5 billion, $10.8 billion and $3.0 billion, respectively.
* The company believes that constant currency information is useful in analyzing the underlying trends in average monthly revenue per paying membership. In order to exclude the effect of foreign currency rate fluctuations on average monthly revenue per paying membership, the Company estimates the current period revenue assuming foreign exchange rates had remained constant with foreign exchange rates from each of the corresponding months of the prior-year period.