Click For Photo: https://zh-prod-1cc738ca-7d3b-4a72-b792-20bd8d8fa069.storage.googleapis.com/s3fs-public/styles/max_650x650/public/2019-04/NFLX%20cash%20burn%20Q1%202019.jpg?itok=WSXr2v5r
Back in January, when Netflix reported unexpectedly poor Q4 earnings, what surprised most investors was the company's unexpectedly weak outflook, especially on the international side, where Netflix warned of a decline in International sub growth, a very concerning development for a company which has largely saturated the local market and is growing almost entirely offshore. Which is why everyone's attention was focused on just how bad subscriber growth Netflix would report after the close today.
In retrospect, nobody was prepared for just how bad the final number would be, because moments ago while Netflix reported some rather impressive top and bottom line results, it was the collapse in subscriber growth that is the reason why the stock is tumbling after hours.
News - EPS - Cents - Cents - Revenue
First the good news: EPS of 76 cents was above the 58 cents expected, with revenue of $4.521 right on top of the expected $4.51. Additionally, the company reported a rather impressive Q1 EBITDA of $584 million, well above the $328MM in Q4. Of course, if that was the extent of it, NFLX stock would be surging. Looking ahead, Netflix reported that Q2 forecast revenue would be $4.928BN, a 26.1% increase Y/Y, which however is below the consensus estimate of $4.95BN, a number which would generate EPS of $0.55.
Looking again at the financials, Netflix said that operating margin of 10.2% exceeded our beginning-of-quarter expectation, as spending was shifted from Q1 to later in the year. The company also revealed that streaming content obligations dipped sequentially in Q1 to $18.9 billion from $19.3 billion, "due in part to the timing of run-of-series commitments" however the company cautioned that as it shifts to more original content, "there will be greater variability in content obligations."
Reason - Netflix - Hours - Quarter - Growth
However, the reason why Netflix is tumbling after hours is because just like one quarter ago, the growth story is...
Wake Up To Breaking News!