This week, many public companies presented their investors with the results of 2020 and, specifically, its 4th quarter. Anyway, only Netflix's report had an astonishing effect. Find out right now what was so amazing about the report of the US streaming service and how the market reacted.
What is it with the report?
On January 19th, Netflix — one of the most popular streaming platforms in the world — presented its statistics for the 4th quarter of 2020 and the whole of the last year. To put it shortly, things are flourishing: the company does not need any new loans, affords to buy back stocks, and invests more and more in creating fresh content.
Details and digits
In the 4th quarter, the revenue grew by 21.5% compared to the same period of the previous year, amounting to 6.64 billion USD. This means it exceeded the expectations of analysts who had forecast growth to 6.6 billion USD. The yearly revenue increased by 24%, reaching almost 25 billion USD.
The net profit in October-December, 2020 shrank by 7.6% to 542 million USD. In the same period of 2019, it was 586 million USD. However, if we compare the profit of 2019 and 2020 on the whole, we will see growth by 47.9%: 1.87 billion vs 2.76 billion USD.
As for the quarterly profit per stock, it turned out 0.19 USD below the forecast, amounting to 1.19 USD. Note that in the 4th quarter of 2019, it was 8% higher, reaching 1.3 USD. The yearly digits are 6.08 USD, which is almost 2 USD more than in 2019.
What's with the audience?
Wall Street experts expected the number of Netflix subscribers to grow by 6.06 million people in the 4th quarter of 2020. However, the company reported growth by 8.51 million users. This is 40.4% over the forecast! During the year, the audience grew by 37 million subscribers, reaching 203.7 million total.
What are the forecasts for Q1, 2021?
Let's compare the statistics of Q1, 2020 with the forecasts for the upcoming 3 months:
- Revenue — 7.1 billion USD (+23.6%)
- Net profit — 1.36 billion USD (+92%)
- Return on stock — 2.97 USD (+90%)
- New users — 6 million.
- No new loans
- Buyback of shares
- One new movie every week, 70 releases a year.
How did the market react?
The report came like a blow on the market: on January 20th, Netflix's stocks leaped up by 16.85% — from 501.77 to 586.34 USD. The market capitalization of the company grew to 259.04 billion USD. That day, the stock price reached 593.23 USD.
A US company Netflix, owning a streaming service of the same name, presented a report on the results of the 4th quarter of 2020 and the whole year. The market went mad. The company's stock price increased by 17% overnight, and the reaction is understandable: the revenue grew by 24%, net profit — by 47.9%, audience — by 32.1%.
As for the content, according to the Wall Street Journal, Netflix has over 500 series and movies more or less close to release. These are volumes that rivals can only dream of.