Netflix Inc (NFLX) 10-Q Quarterly Report October 2021

After a lighter-than-normal content slate in Q1 and Q2 due to COVID-related production delays in 2020, we are seeing the positive effects of a stronger slate in the second half of the year. In Q3, we grew revenue 16% year over year to $7.5 billion, while operating income rose 33% vs. the prior year quarter to $1.8 billion. We added 4.4m paid net adds (vs. 2.2m in Q3’20) to end the quarter with 214m paid memberships. We’re very excited to finish the year with what we expect to be our strongest Q4 content offering yet, which shows up as bigger content expense and lower operating margins sequentially.


(in millions except per share data)	Q3'20			Q4'20			Q1'21			Q2'21			Q3'21			Q4'21 Forecast
Revenue	$	6,436		$	6,644		$	7,163		$	7,342		$	7,483		$	7,712
Y/Y % Growth	22.7		%	21.5		%	24.2		%	19.4		%	16.3		%	16.1		%
Operating Income	$	1,315		$	954		$	1,960		$	1,848		$	1,755		$	500
Operating Margin	20.4		%	14.4		%	27.4		%	25.2		%	23.5		%	6.5		%
Net Income	$	790		$	542		$	1,707		$	1,353		$	1,449		$	365
Diluted EPS	$	1.74		$	1.19		$	3.75		$	2.97		$	3.19		$	0.80

Global Streaming Paid Memberships	195.15			203.66			207.64			209.18			213.56			222.06
Y/Y % Growth	23.3		%	21.9		%	13.6		%	8.4		%	9.4		%	9.0		%
Global Streaming Paid Net Additions	2.20			8.51			3.98			1.54			4.38			8.50

Net cash provided by (used in) operating activities	$	1,264		$	(138)		$	777		$	(64)		$	82
Free Cash Flow*	$	1,145		$	(284)		$	692		$	(175)		$	(106)
Shares (FD)	455.1			455.3			455.6			455.1			454.9
Note: Figures are consolidated, including DVD.
* Free cash flow represents Net Cash provided by (used in) operating activities less purchases of property and equipment and change in other assets.


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The following information was filed by Netflix Inc (NFLX) on Tuesday, October 19, 2021 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:

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 $308 million of non-cash stock-based compensation expense, $275 million of non-cash remeasurement loss on our euro-denominated debt, $239 million non-cash valuation allowance for deferred taxes due to legislation which imposed an annual cap on research and development credits and $29 million favorable other working capital differences.

Revenue - Geography Highlight
In the three and nine months ended September 30, 2021, the foreign exchange gains were primarily driven by the non-cash gains of $136 million and $327 million, respectively, from the remeasurement of our 5,170 million Senior Notes, partially offset by the remeasurement of cash and content liability positions in currencies other than the functional currencies.
Financial - Expense Highlight
24 Table of Contents Technology and Development 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 recommendations, merchandising and streaming delivery technology and infrastructure.
Revenue - Product Highlight
The increase in average monthly revenue per paying membership resulted from our price changes and favorable fluctuations in foreign exchange rates.
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.
Financial - Cash Flow
Free cash flow was $1,555...Read more
Financial - Cash Flow
Free cash flow was $4,098...Read more
Financial - Earnings
At September 30, 2021, our...Read more
Financial - Earnings
The increase in operating margin...Read more
Financial - Expense
In addition, third-party expenses, including...Read more
Financial - Earnings
Our core strategy is to...Read more
Financial - Expense
The decrease in interest expense...Read more
Other - Other
Net cash used in investing...Read more
Financial - Cash Flow
Free cash flow was $355...Read more
M & A - Other
These contracts are primarily related...Read more
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Stock repurchases may be effected...Read more
Other - Other
However, these unknown obligations are...Read more
Revenue - Product
The increase in our consolidated...Read more
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Debt, net of debt issuance...Read more
Financial - Expense
Expenses associated with the acquisition,...Read more
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Three months ended September 30,...Read more
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Revenue - Product
We have built our own...Read more
Revenue - Product
For the three and nine...Read more
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We offer a variety of...Read more
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Off-Balance Sheet Arrangements We do...Read more
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Marketing expenses also include payroll...Read more
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26 Table of Contents Interest...Read more
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Results of Operations The following...Read more
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As of September 30, 2021,...Read more
Revenue - Geography
In the three and nine...Read more

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: 0001065280-21-000363
Submitted to the SEC: Thu Oct 21 2021 4:02:00 PM EST
Accepted by the SEC: Thu Oct 21 2021
Period: Thursday, September 30, 2021
Industry: Video Tape Rental