Netflix, Inc. (NASDAQ: NFLX) was one we knew would see a different format on earnings. The company tried to pull the sneaky maneuver of releasing earnings on its website rather than via a press release after the close. This is not the norm and some companies are trying to move in this direction. The home video delivery cult stock showed that its earnings were $0.87 EPS and revenue was roughly $596 million for the quarter. Thomson Reuters had estimates of $0.71 EPS and $597.49 million in revenues.
The revenue figure seems to have weighed more than others, but it ended the quarter with roughly 20.1 million subscribers versus a 19.7 to 19.9 million expected. The net subscriber adds were 3.08 million in the quarter.
Netflix also gave guidance. For Q1 it sees domestic subscribers of between 21.9 million and 22.8 million, with revenues (international and domestic) of $694 to $718 million. For international growth, it sees 750,000 to 900,000 subscribers. For Q1 it sees $0.90 to $1.13 EPS. Thomson Reuters has estimates of $0.87 EPS and $670.91 million in revenues.
For the year it sees growth of 7.7 million net subscribers, while its early 2010 projection was about 3.6 million additions. At the end of Q4, about 9% of subscribers were active free trials. The percentage of free subscribers is more than ever, which the company noted is “due to the expanded use of one month free trials over two-week free trials, and to strong growth in December.”
For the next few quarters the company is targeting domestic operating margin of about 14% as a balance of growth and earnings. GAAP income in the quarter was $47 million against $51 million in free cash flow.
The company did not do a traditional press release and its release was very different in formatting on its website. The growth is impressive here, but the change to a no-release mechanism is one that companies should be ashamed of. The company is going to have a conference call today and we have heard that the Q&A session is not expected to be as open as others.
Netflix shares were down 1.99% at $183.03 at the close and shares are trading up more than 6% at $195.00 in the after-hours session.
The full release is here.
JON C. OGG
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