In a note to investors, Jeff Wlodarczak, an analyst at Pivotal Research wrote, “Importantly, while Netflix beat subscriber expectations in all major territories, Netflix’s most mature market U.S./Canada reported materially better than expected nearly +900K net new subscribers (vs. our +375K expectation) which highlight that the ultimate penetration for NFLX services globally could be higher than anticipated.”
Additionally, Netflix reported that it may no longer need to raise external financing to fund its day-to-day operations. The company said it expects to become cash-flow positive after 2021.
“Wit $8.4 billion in cash on our balance sheet at the end of the quarter plus our $750m credit facility (which is undrawn), our need for external financing is diminishing. As indicated last quarter, we don’t have plans to access the capital markets this year, according to the company in its letter to shareholders.
Jefferies analyst Alex Giaimo commented: “Netflix has been working towards this moment for multiple years, and is now in the unique position to continue its aggressive content spend while still generating significant future cash flows.”
