Netflix Inc (NFLX) 10-Q Quarterly Report October 2020

As we expected, growth has slowed with 2.2m paid net adds in Q3 vs. 6.8m in Q3’19. We think this is primarily due to our record first half results and the pull-forward effect we described in our April and July letters. In the first nine months of 2020, we added 28.1m paid memberships, which exceeds the 27.8m that we added for all of 2019. In these challenging times, we’re dedicated to serving our members.


(in millions except per share data and Streaming Content Obligations)	Q3'19			Q4'19			Q1'20			Q2'20			Q3'20			Q4'20 Forecast
Revenue	$	5,245		$	5,467		$	5,768		$	6,148		$	6,436		$	6,572
Y/Y % Growth	31.1		%	30.6		%	27.6		%	24.9		%	22.7		%	20.2		%
Operating Income	$	980		$	459		$	958		$	1,358		$	1,315		$	885
Operating Margin	18.7		%	8.4		%	16.6		%	22.1		%	20.4		%	13.5		%
Net Income	$	665		$	587		$	709		$	720		$	790		$	615
Diluted EPS	$	1.47		$	1.30		$	1.57		$	1.59		$	1.74		$	1.35

Global Streaming Paid Memberships	158.33			167.09			182.86			192.95			195.15			201.15
Y/Y % Growth	21.4		%	20.0		%	22.8		%	27.3		%	23.3		%	20.4		%
Global Streaming Paid Net Additions	6.77			8.76			15.77			10.09			2.20			6.00

Net cash provided by (used in) operating activities	$	(502)		$	(1,462)		$	260		$	1,041		$	1,264
Free Cash Flow*	$	(551)		$	(1,670)		$	162		$	899		$	1,145
Adjusted EBITDA**	$	1,107		$	586		$	1,084		$	1,489		$	1,450
Shares (FD)	451.6			451.4			452.5			453.9			455.1
Streaming Content Obligations*** ($B)	19.1			19.5			19.2			19.1			19.1
Note: Figures are consolidated, including DVD.
* Free cash flow represents Net Cash provided by (used in) operating and investing activities
** Adjusted EBITDA represents net income before interest expense and other income/expense, income taxes, depreciation and amortization of property and equipment and further adjusted to exclude other non-cash charges or non-recurring items
*** Corresponds to our total known streaming content obligations as defined in our financial statements and related notes in our most recently filed SEC Form 10-K


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The following information was filed by Netflix Inc (NFLX) on Tuesday, October 20, 2020 as an 8K 2.02 statement, which is an earnings press release pertaining to results of operations and financial condition. It may be helpful to assess the quality of management by comparing the information in the press release to the information in the accompanying 10-Q Quarterly Report statement of earnings and operation as management may choose to highlight particular information in the press release.

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Inside Netflix Inc's 10-Q Quarterly Report:

Revenue - Geography Highlight
In the three and nine months ended September 30, 2019, the foreign exchange gains were primarily driven by the gains of $171 million and $168 million, respectively, from the remeasurement of our 3,600 million Senior Notes, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies.

Other - Other Highlight
Net cash provided by financing activities increased $57 million for the three months ended September 30, 2020, due to an increase in the proceeds from the issuance of common stock.
Financial - Expense Highlight
Technology and development expenses consist of payroll and related expenses for all technology personnel, as well as other costs incurred in making improvements to our service offerings, including testing, maintaining and modifying our user interface, our recommendation, merchandising and streaming delivery technology and infrastructure.
Financial - Cash Flow Highlight
Free cash flow was $13 million lower than net income for the nine months ended September 30, 2020 primarily due to $864 million of cash payments for content assets over amortization expense, partially offset by $275 million of non-cash remeasurement loss on our euro-denominated debt, $239 million non-cash valuation allowance for deferred taxes due to recent legislation which imposed an annual cap on research and development credits, $308 million of non-cash stock-based compensation expenses and $29 million favorable other working capital differences.
Financial - Expense Highlight
Other operations costs include customer service and payment processing fees, including those we pay to our integrated payment partners, as well as other costs incurred in making our content available to members.
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At September 30, 2020, our...Read more
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Our core strategy is to...Read more
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Free cash flow was $355...Read more
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However, these unknown obligations are...Read more
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Free cash flow was $1,216...Read more
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We offer a variety of...Read more
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Financial Statements, Disclosures and Schedules

Inside this 10-Q Quarterly Report

Material Contracts, Statements, Certifications & more

Netflix Inc provided additional information to their SEC Filing as exhibits

Exhibit 31.1: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.2: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 31.3: Rule 13A-14(A)/15D-14(A) Certification

Exhibit 32.1: Section 1350 Certification

Ticker: NFLX
CIK: 1065280
Form Type: 10-Q Quarterly Report
Accession Number: 0001065280-20-000451
Submitted to the SEC: Thu Oct 22 2020 4:02:00 PM EST
Accepted by the SEC: Thu Oct 22 2020
Period: Wednesday, September 30, 2020
Industry: Video Tape Rental