Netflix's market cap, dividends, sales and earnings in 2020

  •   DEHOUI Lionel

Founded in 1997 and based in California in the United States, NetFlix is an American company operating in the creative industries sector. It is recognised as the undisputed leader in video streaming. During the year 2020, the group took advantage of the health crisis to increase its number of subscribers. Find out in the following lines the main points to remember about the company's results for the whole year.

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Netflix's market cap, dividends, sales and earnings in 2020
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Results for the first quarter of 2020

In the first quarter of 2020, the NetFlix group benefited greatly from the containment imposed in several countries to combat the Covid-19 pandemic. This is illustrated by the good performance achieved during this period. These performances enabled the company to strengthen its position as market leader in the streaming platform sector.

Over the first three months of the year 2020, the Californian firm achieved a turnover of 5.8 billion dollars. This was 28% higher than in the same period last year. In Q1-2020, the company saw its net profit double to $709 million.

Also, the streaming platform saw a remarkable increase in subscribers in the January to March 2020 period. It added 15.8 million new paying subscribers in the quarter, compared to 9.6 million a year earlier. This was driven by new households and the return of former subscribers who had terminated their contracts.

 

Strong activity in the second quarter of 2020

Containment continued to have a positive impact on NetFlix's business in the second quarter of 2020. It significantly boosted the group's results over this period. This quarter was as prolific as the previous one. This is illustrated in particular by the growth in the company's revenues.

Indeed, over the whole of Q2-2020, the group's revenue reached 6.15 billion dollars. It reported a 25% year-on-year increase. The company even exceeded the market's expectations of a $6.08 billion turnover for the quarter. Quarterly profits were $720 million, compared to $271 million in Q2-2019.

However, earnings per share were lower than expected. It came in at $1.59 compared to the market's estimate of $1.81. On the other hand, the platform's subscriber base continued to grow in Q2 2020. In the April-June period, it added 10.1 million subscribers.

By the end of June 2020, the group had 192.95 million users worldwide. Thus, it was gradually approaching the symbolic 200 million subscriber mark. In the first half of 2020 as a whole, the number of new registered users reached 26 million, compared to 27.8 million in the whole of 2019.

 

Less attractive performance in Q3 2020

After posting strong results for the first six months of 2020, NetFlix had a weak third quarter. During this period, the group's activity was less prolific compared to the previous two quarters. Overall, it failed to meet its quarterly growth targets.

In the 'July-September 2020' period, the streaming platform signed up 2.2 million new subscribers. Although this figure seems impressive, it fell short of forecasts for a total of 2.5 million new users. A year earlier, at the same time, it had reached 6.8 million.

Furthermore, this is the group's weakest quarter since Q2-2016. In the first nine months of 2020, the streaming service registered 28.1 million new members. This number is higher than the 27.8 million users noted for the entire previous year.

At the end of September 2020, NetFlix had 195.15 million subscribers. For the whole of Q3-2020, the global SVOD leader had revenues of $6.44 billion, up from $5.25 billion a year earlier. At this level, it did better than the $6.38 billion estimate it originally made.

In the third quarter of 2020, the Californian firm posted a net profit of $790 million. A year earlier, it was $665 million.

 

Q4 and full-year 2020 results

In the fourth quarter of 2020, NetFlix exceeded all expectations by signing up 8.5 million new subscribers, compared to an initial forecast of 6 million. With this figure, the streaming platform passed the symbolic 200 million user mark for the first time in its history.

To be more precise, the number of subscribers as of 31 December 2020 is 203.66 million. Over the whole of 2020, the Californian firm gained 37 million customers. It should be noted that the company achieved this performance despite the strong competition imposed by the arrival of Disney.

In the last three months of 2020, the Los Gatos firm's turnover amounted to 6.64 billion dollars, up 21.5% year-on-year. This growth was driven by the containment measures related to the health crisis and the closure of movie theatres.

In addition, the turnover was slightly higher than the market's expectations of $6.6 billion. On the other hand, the group saw its net profit fall by 7.7% to $542 million in Q4-2020.

For the full twelve months of 2020, NetFlix's annual revenue reached $25 billion. It grew by 24% year-on-year. Net profit was $2.76 billion, up 48% from the previous year. Operating profit rose 76% year-on-year to $4.6 billion.

As of 31 December 2020, the group's free cash flow is estimated at $8.2 billion. The company also has $750 million in undrawn credit facilities.

 

NetFlix dividend and market capitalisation

NetFlix is one of the technology companies that do not pay dividends to their shareholders. Furthermore, the company has been present on the stock market since 2002. It is listed on the Nasdaq All Markets in the United States. In November 2021, its market capitalisation is estimated to be over 300 billion dollars.

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