Netflix Performance Recap: A Comprehensive Look
Detailed Examination of the Last Five Quarters' Earnings and Strategic Milestones
Financial Performance:
Q4 2022: Projected free cash flow over $3 billion in 2023, increasing in 2024. Operating margins expected to expand due to revenue growth, content strategy execution, and disciplined cost management.
Q1 2023: Increased free cash flow forecast for 2023, maintaining margin expectations.
Q2 2023: Significant free cash flow in Q2, continued growth expected. Forecasted margin of approximately 22%-23% in 2024.
Q3 2023: Increased buyback of $2.5 billion in Q3, reflecting strong cash position.
Q4 2023: Expectation of healthy double-digit revenue growth.
Q4 2022: Introduction of a major management change with Reed Hastings transitioning to Executive Chairman. Emphasis on continued financial stability and growth.
Return Ratios:
Return on Assets %: 7.6%
Return on Capital %: 15.9%
Return on Equity %: 17.6%
Return on Common Equity %: 17.6%
Margin Analysis:
Gross Profit Margin %: 39.9%
SG&A Margin %: 15.4%
EBITDA Margin %: 17.9%
EBITA Margin %: 16.9%
EBIT Margin %: 16.9%
Income From Continuing Operations Margin %: 10.6%
Net Income Margin %: 10.6%
Normalized Net Income Margin %: 8.1%
Net Avail. For Common Margin %: 10.6%
Levered Free Cash Flow Margin %: 64.5%
Unlevered Free Cash Flow Margin %: 65.7%
Asset Turnover:
Asset Turnover: 0.73x
Fixed Assets Turnover: 13.82x
Receivables Turnover: 33.41x
2. Liquidity:
Q4 2022 & Q1 2023: Focus on maintaining minimum cash equivalent to around two months of revenue.
Here are the bullet points for the financial ratios provided in the image:
Short Term Liquidity:
Current Ratio: 1.12x
Quick Ratio: 0.81x
Op Cash Flow to Current Liab: 0.75x
Avg. Days Sales Outstanding: 11.11
Long-Term Solvency:
Total Debt / Equity: 83.1%
Total Debt / Capital: 45.4%
Total Liabilities / Total Assets: 57.8%
EBIT / Interest Expense: 8.54x
EBITDA / Interest Expense: 9.90x
(EBITDA - Capex) / Interest Expense: 9.44x
FFO Interest Coverage: 9.49x
FFO to Total Debt (x): 0.39x
3. Commercial Performance:
Q4 2022: Advertising platform shows promising early results. Engagement comparable across ad and non-ad plans.
Q1 2023: Advertising strategy prioritizes scaling and developing advertiser-facing features.
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