Netflix is the world’s leading Internet television network with over 57 million members in nearly 50 countries enjoying more than two billion hours of TV shows and movies per month, including original series, documentaries and feature films. Members can watch as much as they want, anytime, anywhere, on nearly any Internet-connected screen. Members can play, pause and resume watching, all without commercials or commitments.
Financials and Market Scope
The Revenue stream can be classified into the US Streaming business and the International Streaming business. Currently the US Streaming business is giving profit to the company but the International business is in loss. The Total Revenue amounted to USD 4.74 billion in the year 2014 as compared to USD 4.374 billion in the year 2013 which translates into a growth of 8.36%. The earnings per share was reported at USD 4.32 per share for 2014 as compared to USD 1.85 in the year 2013 (growth of 133%).
In 2014 the company added a record 13.0 million new members, compared to 11.1 million in 2013, bringing the global total to 57.4 million members with an expectation to reach 61.4 million members at the end of first quarter of 2015.
The international segment has shown healthy growth with net addition of 2.43 million members in Q4, compared to 1.74 million a year ago. Company’s initial set of markets (Canada, Latin America, the UK, Ireland, the Nordic countries and the Netherlands) achieved profitability in Q3 2014 and are expected to grow further. The company has launched services in France, Germany, Austria, Switzerland, Belgium and Luxembourg in the year 2014. In 2015 the company is planning to launch Netflix in Australia and New Zealand.
The company faces intense competition from local content providers in the above mentioned countries. Players such as HBO, Verizon, Redbox, Amazon Prime, Hulu and Yahoo are some of the competitors of Netflix.
The company has a debt equity ratio 0.37 at the end of 2014 and has a current market capitalization of USD 25 billion with a price of USD 422 per share with a Price to Earnings multiple of 97.69. The Market Capitalization to Sales ratio is 5.27. The company has not declared any dividend.
Q4FY14 Results Update
Netflix the No. 1 subscription video-on-demand provider reported quarterly revenue of USD1.48 billion, up 26% year over year, with net income of USD83.4 million (including a USD37.9 million tax benefit). Excluding the tax benefit, Netflix posted EPS of 72 cents. Netflix shares rose 26.67% till date after the quarterly results on 20th January 2015.
The company added 4.33 million in Q4 vs. its projected 4 million — and had a surge in international signups, its growth in the U.S. has decelerated. In the fourth quarter of 2013, the company added 2.33 million domestic streaming subs. As of the end of 2014, Netflix had 39.11 million U.S. streaming subs and 18.28 million internationally.