Netflix Inc. (NASDAQ:NFLX) rallied to all-time highs after reporting impressive Q4 and full-year earnings that topped Wall Street estimates. Overseas expansion propelled the streaming giant to explosive growth in subscribers that blew away analysts’ estimates.
Subscription Growth
In what turned out to be a blockbuster quarter, Netflix added 7.7 million new users outside the U.S and Canada. More than 50% of the new users came from Europe, the Middle East, and Africa. Netflix is increasingly gaining traction in international markets, going by the rate at which it is adding new subscribers.
Netflix continued to beat subscriber expectations in all the major markets. The U.S and Canadian markets recorded 900,000 net new subscribers. In the first half of the year, the company added 25.9 million new users and 36.6 million for the last six months of the year.
Surpassing the 200 million mark on subscriber’s, underscores a company resonating well with consumers worldwide. Likewise, the increase can be attributed to more people consuming content at home in the aftermath of the COVID-19 pandemic. The fact that the company was still able to add new subscribers even on increasing prices for its subscription plan is a good thing.
Sales- Earnings Growth
Subscription growth allowed the streaming giant to top estimates on revenue growth. Likewise, the company reported sales of $6.64 billion, against $6.63 billion expected. Revenues were up by 21.5% compared to the same quarter last year. Quarterly earnings came in at $1.19 a share against analysts’ consensus estimates of $1.39 a share. Similarly, it was an 8% decrease from $1.30 reported in the same period the previous year.
In addition to the company registering a 20% plus an increase in subscriptions, Netflix also achieved yet another milestone. With $8.2 billion in cash and a credit line that has not been drawn. The company remains financially stable capable of fuelling debt free growth.
After an impressive 2020, Netflix has warned that subscribers' surge in 2020 could limit growth in 2021. Likewise, the company has given conservative estimates in that it expects to add 6 million subscribers against 7.45 million expected.