Reed’s gambit

19 January 2021 By Jennifer Saba Follow @jennifersaba

The $220 bln streaming service expects free cash flow to break even in 2021 just as competition with Disney and others intensifies. Pressure to attract more subscribers with fresh programming keeps growing. That makes a studio or content acquisition more appealing than buybacks.

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Netflix said on Jan. 19 that revenue for the fourth quarter increased 22% from a year earlier, to $6.6 billion, after adding 8.5 million net new subscribers, more than the 6.1 million that analysts had been projecting, according to Refinitiv.

The streaming service reported net earnings for the quarter of $542 million, or $1.19 per share, compared to $587 million, or $1.30 per share, during the same period in 2019.

Netflix added that it expects free cash flow to break even in 2021 and that it no longer has a need to raise external financing for day-to-day operations.

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