Netflix announces upcoming share buybacks as subscribers reach 200 million

Netflix will no longer increase debt to fund its spending frenzy on TV shows and movies and may start returning money to shareholders through buyouts, marking a milestone in the company’s evolution. because it said it exceeded 200 million subscribers.

Since 2011, when Netflix launched into original programming with Card castle, the streaming pioneer funded content through high yield bonds as he sought to spend more than Hollywood studios and create an attractive catalog.

Netflix’s latest quarterly figures on Tuesday underscored the success of the strategy: it had nearly 204 million subscribers by the end of 2020, he said, after adding 37 million new paying customers over the course of the year. ‘year.

Some 8.5 million of them were added between the quarter and the end of December, eclipsing analysts’ forecasts of 6 million.

“We believe we no longer need to raise external funding for our day-to-day operations,” Netflix said in a letter to investors, adding that it would explore share buybacks.

The shares jumped about 10 percent in after-hours trading.

The California-based company has thrilled investors in recent years despite burning billions of dollars in cash. Netflix had promised that as it hooked up more customers and increased subscription prices, it ultimately wouldn’t need to keep increasing junk debt to fuel its content spending.

That thesis has largely unfolded, aided by a global pandemic that has drawn people trapped home in lockdowns on Netflix’s streaming platform and kept it comfortably ahead in the subscriber race. Its fiercest rival, Disney Plus, has 87 million subscribers worldwide.

The majority of new listings in the fourth quarter came from outside the United States. In October, Netflix increased prices in the United States, its biggest market, from $ 1 to $ 14 per month for its most popular plan.

Revenue for the quarter jumped 22% from the same period last year to $ 6.6 billion, according to analysts’ forecasts. Net income fell to $ 542 million from $ 587 million a year ago.