Netflix will no longer raise debts to finance its spending spree on television shows and movies, and may begin to return money to shareholders through repurchases, marking a milestone in the company’s evolution, as it said it has exceeded 200 million subscribers.
Since 2011, when Netflix jumped into original programming with House of cards, the streaming pioneer financed content through high-yield titles, looking to spend more than Hollywood studios and building an attractive catalog.
Netflix’s latest quarterly figures on Tuesday highlighted how successful this strategy was: it had almost 204 million subscribers at the end of 2020, he said, adding 37 million new paying customers during the year.
About 8.5 million of them were added in the quarter through the end of December, eclipsing analysts’ forecasts of 6 million.
“We believe that we no longer need to raise external financing for our day-to-day operations,” Netflix said in a letter to investors, adding that it would explore the share buyback.
Shares jumped about 10% in after-hours trading.
The California-based company has delighted investors in recent years, despite spending billions in cash. Netflix had promised that as it gained more customers and increased subscription prices, it would no longer need to increase its trash debt to fuel its content spending.
That thesis was largely fulfilled, helped by a global pandemic that attracted people trapped at home, trapped on the Netflix streaming platform, and kept them comfortably ahead in the race for subscribers. Its fiercest rival, Disney Plus, has 87 million subscribers worldwide.
Most new registrations in the fourth quarter came from outside the United States. In October, Netflix raised prices in the United States, its biggest market, from $ 1 to $ 14 a month for its most popular plan.
Revenues in the quarter increased by 22% over the same period last year, to $ 6.6 billion, in line with analysts’ forecasts. Net income fell to $ 542 million, from $ 587 million the previous year.