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The Future Looks Promising for Netflix Inc (NFLX)

Netflix Inc (NFLX) subscribers have exceeded 200 million by the end of 2020. Streaming service Netflix announced this in its annual and fourth-quarter reports, published after the close of trading on January 19. As a result of its profits surpassing its needs, Netflix does not anticipate that it will need to borrow money to fund its strategy. Shares of Netflix rose 12.6% to $565.05 on the NASDAQ aftermarket.

What’s the driving force here?

As of 2020, there are 37 million paid subscribers to Netflix, up from 28 million the previous year. There were several reasons for this, including pandemic and quarantine restrictions. In the fourth quarter, the number of subscribers increased by 8.51 million – more than analysts’ forecasts, expecting an increase of 6.06 million. Twenty-three million people worldwide watched Netflix broadcasts by subscription at the end of the year.

Netflix Inc (NFLX) is sufficiently prepared to deal with the pandemic and kept its audience happy by offering them new products. It creates content in advance, so it has over 500 movies ready for release or in the final production stages, unlike many competitors who have left with no new films because of the pandemic.

Netflix Future Looks Promising

In response to the Netflix results, investors have expressed much less concern about the $15.8 billion accumulated in the company. During the last two years, the service borrowed approximately $5 billion to implement its development strategy. Netflix experienced a decline in share price in 2020 as a consequence.

Netflix management believes that Netflix’s cash flow will reach break-even in 2021, eliminating the requirement for further loans. It is expected that the negative cash flow will be $619.7 million. There has been a significant improvement in the company’s free cash flow since 2019 when it amounted to -$3.3 billion.

During the fourth quarter, Netflix Inc (NFLX) came in at $63.64 billion, up 21.5% year-over-year. Despite these losses, net income was $542 million, down 7.6%. Netflix has predicted revenue growth of 23.6% YoY to $7.1 billion for the first quarter of this year. The company expects net income to grow to $1.36 billion.

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