(L-R) Reed Hastings and Ted Sarandos attend the “Marseille” Netflix TV Serie World Premiere At Palais Du Pharo In Marseille, on May 4, 2016 in Marseille, France.
Stephane Cardinale | Corbis | Getty Images
Netflix reported earnings for the fourth quarter of 2020 after the bell on Tuesday, announcing it is “very close” to being free cash flow positive and is considering stock buybacks. This year, it expects to be around break even on cash flow.
The stock was up about 8% after hours.
Here are the key numbers:
- Earnings per share (EPS): $1.19 vs $1.39 expected, according to Refinitiv survey of analysts
- Revenue: $6.64 billion vs $6.626 billion expected, according to Refinitiv
- Global paid net subscriber additions: 8.5 million vs 6.47 million expected, according to StreetAccount
Netflix’s expectation of soon becoming free cash flow positive would bring to life the bull case for the stock. Netflix said it would no longer need external financing and would even explore returning cash to shareholders.
Netflix hasn’t made such a move since 2011, a pivotal year in the company’s shift from DVDs to streaming.
The company said it intends to pay down more of its debt as well. It’s raised $15 billion in debt since 2011 and currently has $8.2 billion cash on hand.
Netflix has been free cash flow positive for the past three quarters, though executives mostly credited that as an effect of postponed production during the pandemic. The company anticipated free cash flow would be slightly negative in the last quarter of 2020 as production restarts in some regions.
-CNBC’s Alex Sherman contributed to this report.
This story is developing. Check back for updates.
