Netflix_Inc..pdf

April 6th, 2022

Netflix, Inc. Profile

100 Winchester CirLos Gatos, CA 95032-1815 United StatesPhone: 1-408-540-3700http://www.netflix.com

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Table of Contents

Company Overview 1

Key Information 1

Key Financials 1

Company Rankings 2

Key People 2

Company Description 3

Company History 4

Industry Information 5

People 6

Employees 6

Board Members 6

Biographies 7

REED HASTINGS 7

TED SARANDOS 7

SPENCER NEUMANN 7

GREG PETERS 7

DAVID HYMAN 7

Company Financials 9

Financial Summary 9

Annual Income Statement 10

Quarterly Income Statement 11

Annual Balance Sheet 12

Quarterly Balance Sheet 13

Annual Cash Flow 14

Quarterly Cash Flow 15

Financial Market Data 16

Historical Financials 17

Competition 18

Competitors List 18

Competitive Landscape 18

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Company Overview

100 Winchester CirLos Gatos, CA 95032-1815 United StatesPhone: 1-408-540-3700http://www.netflix.com

Netflix and chill? More like Netflix and bill the increasing number of global viewers who subscribe to the video streaming service. The world's leading internet streaming company distributes movies and TV shows in a variety of genres and languages to with approximately 204 million paid subscribers in more than 190 countries. Members can watch as much as they want, anytime, anywhere, on any internet-connected screen. Members can play, pause and resume watching, all without commercials. Netflix still sends DVDs to US customers through the mail, though the legacy business gets smaller every year.

Key Information

DUNS Number 799646716Location Type Parent/HeadquartersSubsidiary Status NoManufacturer YesCompany Type Publicly Traded Company – CorporationPlant/Facility Size (Square Feet) 8,773.00Owns/Rents LeasesAccountant EYTotal Employees 9,400Employee Growth (1-3 years) 70%Employees At This Location 166Year of Founding or Change in Control 1998Primary Industry 1848: Consumer Product RentalPrimary SIC Code 78419902: Video disk/tape rental to the general publicPrimary NAICS Code 532282: Video Tape and Disc RentalTradestyle NetflixLatitude/Longitude 37.25921 / -121.962572

Key Financials

Fiscal Year-End December2020 Sales (Actual) $24,996.06M1-Year Sales Growth 24.01%Net Income $2,761.40M1-Year Net Income Growth 47.91%Total Assets $39,280.36MMarket Value $229,074.35MPrescreen Score Low Risk

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Company Rankings

115 in Fortune 1000 Revenue Rank (2021)115 in Fortune 500 (2021)

Key People

Name Title

REED HASTINGS Chairman of the Board, Co-Chief Executive OfficerTED SARANDOS Officer, Co-Chief Executive OfficerSPENCER NEUMANN Chief Financial OfficerGREG PETERS Officer, Chief Operating OfficerDAVID HYMAN Officer, Secretary

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Company Description

OperationsNetflix operates as one operating segment. Its revenues are primarily derived from monthly membership fees for services related to streaming content to its members Almost all of the company's sales were generated from its streaming revenues. It offers a variety of streaming membership plans, the price of which varies by country and the features of the plan. The pricing on its plans ranged from the US dollar equivalent of $2 to $24 per month. The company expects that from time to time the prices of its membership plans in each country may change and may test other plan and price variations.

Financial PerformanceCompany's revenue in fiscal 2020 was $25.0 billion. Consolidated revenues for the year ended December 31, 2020 increased 24% as compared to the year ended December 31, 2019. The increase in our consolidated revenues was due to the 24% growth in average paying memberships and a 1% increase in average monthly revenue per paying membership. Net income for 2020 increased to $2.8 billion compared from the prior year with $1.9 billion. Cash held by the company at the end of fiscal 2020 increased to $8.2 billion compared from the prior year with $5.0 billion. Cash provided by operations and financing activities were $2.4 billion and $1.2 billion, respectively. Cash used for investing activities was $505.4 million, mainly for purchases of property and equipment.

Geographic ReachThe Los Gatos, California-based Netflix has moved beyond the borders of the US to reach more than 190 countries. Netflix has also created and licensed content for local markets across the globe.

Mergers and AcquisitionsIn 2020, Netflix Inc. has completed its acquisition of Hollywood's iconic Egyptian Theatre from Los Angeles nonprofit American Cinematheque. "The collaboration will allow the American Cinematheque to expand the scope and diversity of programming, while continuing the nonprofit's mission to celebrate the experience of cinema as a moving art form," Netflix said in a statement. Terms of the deal were not disclosed.

Sales and MarketingNetflix has spent increasing amounts of money on advertising, $1,447 million, $1,879 million, and $1,808 million for the FY 2020, 2019, and 2018, respectively. It offers a month-long free trial at sign-up to first-time subscribers, a key marketing strategy for the company.

StrategyThe company's core strategy is to grow its streaming membership business globally within the parameters of its operating margin target. Netflix is continuously improving its members' experience by expanding its content with a focus on a programming mix of content that delights members and attracts new members. In addition, the company is continuously enhancing its user interface and extending its streaming service to more internet-connected screens. Netflix' members can download a selection of titles for offline viewing.

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Company History

Company BackgroundMarc Randolph and Reed Hastings founded the DVD-by-mail service in 1997 as a challenge to Blockbuster Video. (Hastings said he got the idea after being hit with a $40 late fee from Blockbuster for failing to return his copy of Apollo 13, which was overdue by about a month.) The company launched its streaming service in 2007, placing a big (and eventually winning) bet on the popularity of accessing entertainment content via subscriptions over the internet. Netflix released its first original TV series, House of Cards, in 2013. The critically-acclaimed show was also a hit with audiences, putting the streaming company on the map as a producer of high quality content.

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Industry Information

Primary SIC Code78419902: Video disk/tape rental to the general public

Primary NAICS Code532282: Video Tape and Disc Rental

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People

Employees

Title Name Age Salary Bonus

Chairman of the Board, Co-Chief Executive Officer

REED HASTINGS — $650,000.00 —

Officer, Co-Chief Executive Officer

TED SARANDOS — — —

Chief Financial Officer SPENCER NEUMANN — $6.05M –Officer, Chief Operating Officer

GREG PETERS — — —

Officer, Secretary DAVID HYMAN — $5.50M —

Board Members

Title Name Age

Chairman of the Board, Co-Chief Executive Officer

REED HASTINGS —

Board Member MS. ANN MATHER –Board Member MS. ANNE SWEENEY –Board Member MR. BRADFORD SMITH –Board Member MR. BRIAN KUBIK –Board Member MS. LESLIE KILGORE –Board Member MR. MICHAEL GAINEY –Board Member RODOLPHE BELMER –Member Of The Board Of Directors MR. SKIP BATTLE –Board Member TED SARANDOS –Board Member MR. TIMOTHY HALEY —

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Biographies

REED HASTINGS

Chairman of the Board, President, Co-Chief Executive Officer

Salary: $650,000.00

BiographyMr. Reed Hastings serves as Chairman of the Board, President, Co-Chief Executive Officer of the Company. Mr. Hastings is an active educational philanthropist: he served on the California State Board of education from 2000 to 2004, and after receiving his B.A. from Bowdoin College in 1983 served in the Peace Corps as a high school math teacher in Swaziland. Mr. Hastings previously served on the board of Facebook, Inc. from 2011-2019.

TED SARANDOS

Officer, Co-Chief Executive Officer

SPENCER NEUMANN

Chief Financial Officer

Salary: $6.05M

BiographyMr. Spencer Adam Neumann serves as Chief Financial Officer of the Company. Spencer also worked at the private equity firms of Providence Equity Partners and Summit Partners. Additional positions at The Walt Disney Company, which he initially joined in 1992, included executive vice president of the ABC Televisions Network and CFO of the Walt Disney Internet Group. He is a member of the national board of directors of Make-A-Wish America. Spencer holds both a B.A. in economics and an M.B.A. from Harvard University.

GREG PETERS

Officer, Chief Operating Officer

DAVID HYMAN

Chief Legal Officer and Secretary

Salary: $5.50M

BiographyMr. David A. Hyman J.D. serves as Chief Legal Officer and Secretary of the Company. He has served in this capacity since 2002 and also serves as the Company's Secretary. Prior to Netflix, Mr. Hyman was the General

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Counsel of Webvan, an online internet retailer, having previously held the role of senior corporate counsel. He also practiced law at Morrison & Foerster in San Francisco and Arent Fox in Washington, DC. Mr. Hyman earned his JD and Bachelor's degrees from the University of Virginia.

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Company Financials

Financial Summary

Company Type Publicly Traded Company – CorporationNASDAQ:NFLXParent/Headquarters

Fiscal Year-End December2020 Sales (Actual) $24,996.06M1-Year Sales Growth 24.01%2020 Net Income $2,761.40M1-Year Net Income Growth 47.91%Prescreen Score Low Risk

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Annual Income Statement

All amounts in millions of US Dollars except per share amounts.

Dec 2020 Dec 2019 Dec 2018 Dec 2017Revenue 24,996.06 20,156.45 15,794.34 11,692.71Cost of Goods Sold 15,276.32 12,440.21 9,967.54 8,033.00Gross Profit 9,719.74 7,716.23 5,826.80 3,659.71Gross Profit Margin 38.89% 38.28% 36.89% 31.30%SG&A Expense 5,134.45 5,111.98 4,221.58 2,821.03Depreciation and Amortization — — — –Operating Income 4,585.29 2,604.25 1,605.23 838.68Operating Margin 18.34% 12.92% 10.16% 7.17%Nonoperating Income — — — –Nonoperating Expenses — — — –Income Before Taxes 3,199.35 2,062.23 1,226.46 485.32Income Taxes 437.95 195.32 15.22 (73.61)Net Income After Taxes 2,761.40 1,866.92 1,211.24 558.93

Continuing Operations 2,761.40 1,866.92 1,211.24 558.93Discontinued Operations — — — –Total Operations — — — –Total Net Income 2,761.40 1,866.92 1,211.24 558.93Net Profit Margin 11.05% 9.26% 7.67% 4.78%

Diluted EPS from Continuing Operations — — — –Diluted EPS from Total Operations — — — –Diluted EPS from Total Net Income 6.08 4.13 2.68 1.25Dividends Per Share — — — —

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Quarterly Income Statement

All amounts in millions of US Dollars except per share amounts.

Quarter Ending Jun 2021 Mar 2021 Dec 2020 Sep 2020 Jun 2020Revenue 7,341.78 7,163.28 6,644.44 6,435.64 6,148.29Cost of Goods Sold 4,018.01 3,868.51 4,165.16 3,867.75 3,643.71Gross Profit 3,323.77 3,294.77 2,479.28 2,567.89 2,504.58Gross Profit Margin 45.27% 46.00% 37.31% 39.90% 40.74%SG&A Expense 1,476.14 1,334.92 1,525.04 1,253.02 1,146.65Depreciation and Amortization — — — — –Operating Income 1,847.63 1,959.86 954.24 1,314.86 1,357.93Operating Margin 25.17% 27.36% 14.36% 20.43% 22.09%Nonoperating Income — — — — –Nonoperating Expenses — — — — –Income Before Taxes 1,593.79 2,034.50 506.42 861.46 1,035.60Income Taxes 240.78 327.79 (35.74) 71.48 315.41Net Income After Taxes 1,353.01 1,706.72 542.16 789.98 720.20

Continuing Operations 1,353.01 1,706.72 542.16 789.98 720.20Discontinued Operations — — — — –Total Operations — — — — –Total Net Income 1,353.01 1,706.72 542.16 789.98 720.20Net Profit Margin 18.43% 23.83% 8.16% 12.28% 11.71%

Diluted EPS from Continuing Operations — — — — –Diluted EPS from Total Operations — — — — –Diluted EPS from Total Net Income 2.97 3.75 1.19 1.74 1.59Dividends Per Share — — — — —

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Annual Balance Sheet

All amounts in millions of US Dollars except per share amounts.

AssetsDec 2020 Dec 2019 Dec 2018 Dec 2017

Cash 8,205.55 5,018.44 3,794.48 2,822.80Net Receivables 610.82 454.40 362.71 –Inventories — — — –Other Current Assets — — — –Total Current Assets 9,761.58 6,178.50 9,694.14 7,669.97Net Fixed Assets 960.18 565.22 418.28 319.40Other Noncurrent — — — –Total Assets 39,280.36 33,975.71 25,974.40 19,012.74

Shareholder's EquityDec 2020 Dec 2019 Dec 2018 Dec 2017

Preferred Stock Equity 0.00 0.00 0.00 0.00Common Stock Equity 3,447.70 2,793.93 2,315.99 1,871.40Total Equity 11,065.24 7,582.16 5,238.77 3,581.96Shares Outstanding (M) 442.90 438.81 436.60 433.39

LiabilitiesDec 2020 Dec 2019 Dec 2018 Dec 2017

Accounts Payable 656.18 674.35 562.99 359.56Short-Term Debt 499.88 — — –Other Current Liabilities 4,429.54 4,413.56 4,681.56 4,173.04Total Current Liabilities 7,805.79 6,855.70 6,487.32 5,466.31Long-Term Debt 15,809.10 14,759.26 10,360.06 6,499.43Other Noncurrent 4,600.24 4,778.60 3,888.26 3,465.04Total Liabilities 28,215.12 26,393.56 20,735.64 15,430.79

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Quarterly Balance Sheet

All amounts in millions of US Dollars except per share amounts.

AssetsQuarter Ending Jun 2021 Mar 2021 Dec 2020 Sep 2020 Jun 2020Cash 7,777.53 8,403.71 8,205.55 8,392.39 7,153.25Net Receivables 775.22 807.04 610.82 604.79 565.67Inventories — — — — –Other Current Assets — — — — –Total Current Assets 9,604.28 10,107.51 9,761.58 9,826.48 8,564.14Net Fixed Assets 1,107.44 1,015.42 960.18 828.12 751.94Other Noncurrent — — — — –Total Assets 40,970.97 40,123.01 39,280.36 38,622.54 37,175.28

Shareholder's EquityQuarter Ending Jun 2021 Mar 2021 Dec 2020 Sep 2020 Jun 2020Preferred Stock Equity — — 0.00 — –Common Stock Equity 3,721.25 3,600.08 3,447.70 3,303.48 3,127.81Total Equity 13,863.87 12,884.08 11,065.24 10,333.32 9,334.75Shares Outstanding (M) 442.60 443.38 442.90 441.80 441.02

LiabilitiesQuarter Ending Jun 2021 Mar 2021 Dec 2020 Sep 2020 Jun 2020Accounts Payable 622.93 532.94 656.18 541.30 446.67Short-Term Debt 699.13 698.79 499.88 499.52 499.16Other Current Liabilities 4,197.87 4,297.96 4,429.54 4,599.65 4,664.73Total Current Liabilities 7,832.89 7,961.77 7,805.79 7,939.80 7,626.42Long-Term Debt 14,926.89 14,860.55 15,809.10 15,547.62 15,295.00Other Noncurrent 4,347.32 4,416.61 4,600.24 4,801.81 4,919.11Total Liabilities 27,107.10 27,238.93 28,215.12 28,289.22 27,840.53

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Annual Cash Flow

All amounts in millions of US Dollars except per share amounts.

Dec 2020 Dec 2019 Dec 2018 Dec 2017Cash & Cash Equivalents at Beginning of Year

5,043.79 3,812.04 2,822.80 1,467.58

Net Cash Provided by Operating Activities

2,427.08 (2,887.32) (2,680.48) (1,785.95)

Net Cash Provided by Investing Activities (505.35) (387.06) (339.12) 34.33Net Cash Privided by Financing Activities 1,237.31 4,505.66 4,048.53 3,076.99Net Increase/Decrease in Cash & Equivalents

3,159.03 1,231.28 1,028.93 1,325.37

Cash & Cash Equivalents at End of Year 8,238.87 5,043.79 3,812.04 2,822.80

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Quarterly Cash Flow

All amounts in millions of US Dollars except per share amounts.

Quarter Ending Jun 2021 Mar 2021 Dec 2020 Sep 2020 Jun 2020Cash & Cash Equivalents at Beginning of Year

8,436.45 8,238.87 8,422.28 7,180.05 5,178.19

Net Cash Provided by Operating Activities

(63.76) 777.27 (137.67) 1,263.76 1,041.08

Net Cash Provided by Investing Activities (111.28) (85.62) (146.40) (118.65) (142.00)Net Cash Privided by Financing Activities (480.27) (451.93) 33.99 68.67 1,090.97Net Increase/Decrease in Cash & Equivalents

(655.31) 239.72 (250.08) 1,213.78 1,990.04

Cash & Cash Equivalents at End of Year 7,804.62 8,436.45 8,238.87 8,422.28 7,180.05

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Financial Market Data

Current Information

Last Close (03-Sep-2021) $590.53 Price/Sales Ratio 8.5452-Week High $598.76 Price/Book Ratio 16.5252-Week Low $458.60 Price/Earnings Ratio 53.6360-Month Beta 0.74 Price/Cash Flow Ratio 128.10Market Cap $229,074.35M Return on Assets 7.54%Shares Outstanding 442.60M Return on Equity 29.62%Dividend Rate — Current Ratio 1.25Dividend Yield — Long-Term Debt/Equity 1.43# of Institutional Holders 1,405 % Owned by Institutions 98.66%Latest Short Interest Ratio — Latest Net Insider Transactions —

Growth 12 Month 36 Month 60 Month

Revenue Growth 24.01% 28.82% 29.82%EPS Growth 47.22% 69.43% 85.08%Dividend Growth — — —

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Historical Financials

Income Statement

Year Revenue ($M) Net Income ($M) Net Profit Margin

Dec 2020 24,996.06 2,761.40 11.05%Dec 2019 20,156.45 1,866.92 9.26%Dec 2018 15,794.34 1,211.24 7.67%Dec 2017 11,692.71 558.93 4.78%

2020 Year-End Financials

Debt Ratio 142.87%Return on Equity 29.62%Cash ($M) 8,205.55Current Ratio 1.25Long-Term Debt ($M) 15,809.10Shares Outstanding (M) 442.60Dividend Yield –Dividend Payout –Market Cap ($M) 229,074.35

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Competitors List

Company Gross Revenue Employees

Amazon.com, Inc. (Top Competitor) $386,064.00M 1,298,000Apple Inc. $274,515.00M 147,000AT&T Inc. $171,760.00M 230,000Best Buy Co., Inc. $47,262.00M 125,000Charter Communications, Inc. $48,097.00M 96,100Comcast Corporation $103,564.00M 168,000Directv Group Holdings, LLC $2,686.68M 31,700Dish Network Corporation $15,493.44M 13,500Echostar Corporation $1,887.91M 2,400Google LLC $2,151.91M 47,756Hastings Entertainment, Inc. — 5,428Home Box Office, Inc. $772.32M 2,000Hulu, LLC $405.03M 2,350Loon LLC (Top Competitor) $72.30M 88Redbox Automated Retail, LLC (Top Competitor) $135.12M 750Showtime Networks, Inc. $347.70M 600Time Warner Cable Enterprises LLC $8,007.01M 16,000Verizon Communications Inc. $128,292.00M 132,200Walmart Inc. $559,151.00M 2,300,000

Competitive Landscape

Companies listed are Top Competitors.

Key Numbers Netflix, Inc. Amazon.com, Inc.