Netflix Annual Report: Sales, Revenue, Profits & Quarterly Earnings of 2013

Netflix, headquartered in Los Gatos, California, is the world’s leading internet television network with over 40 million members in 41 countries. The company was established in 1997 in Scotts Valley, California by Marc Randolph and Reed Hastings who were coworkers at ‘Pure Software’. Randolph was a co-founder of a computer mail order company named ‘Micro Warehouse’ and Hastings was once a math teacher. The Pure Software Company had recently sold for $700 million. Netflix initiated an IPO on 29th May 2002 by selling 5.5 million equity shares at a price of $15.00 per share.

Netflix, Inc. is an American provider that provides on-demand internet streaming data mainly in North and South America. As per recent report by the company dated April, 2013, it had 36.3 million subscribers of which 29.2 million in USA and 40.4 million global streaming subscribers of which 31.2 million in USA. ‘On-demand internet streaming’ is streaming media content transmitted to the client upon their request. There are two types of streaming: on-demand and live. On-demand streaming, focuses on update. It is the transmission of audiovisual content previously stored on a server is transmitted at the request by the user. Live streaming is the real-time broadcasting of live events over the Internet. ‘Global streaming’ enables the real time or on demand distribution of audio, video and multimedia on the internet.

Netflix Annual Sales, Annual Revenue, Annual Profits

The total revenue figure of al has become more than double over last four year period from $1,670.3 million in December 2009, to $3.609.3 million in December ending 2012. It is a rise by 116% over the 2009 year end. The increase in gross profit was more significant at 166% over this period. However, if we calculate the rate of gross profit percentage in respective years, the yearly rate has dropped from 35.4% (Dec 2009) to 27.2% (Dec 2012) as per the table on Financial Performance mentioned below.  This rate in recent years was maximum in 2010 at 37.2% in 2010 when the profit was $805.3 million on total revenue of $2,162 million. The Net Income for the December 2011 was at best at $226.1 million because of revenue came from EBT including unusual items. The total income at $226.1 million in December 2011 was the highest in last 10 year end results.

Amount in Million US$

 

Dec 31, 2012

Dec 31, 2011

Dec 31, 2010

Dec 31, 2009

Revenues 3,609.3 3,204.6 2,162.6 1,670.3
Total Revenues 3,609.3 3,204.6 2,162.6 1,670.3
Cost Of Goods Sold 2,625.9 2,039.9 1,357.4 1,079.3
Gross Profit 983.4 1,164.7 805.3 591.0
Selling General & Admin Expenses, Total 604.4 520.6 358.3 286.6
R&D Expenses 329.0 259.0 163.3 114.5
Other Operating Expenses, Total 933.4 779.6 521.6 401.2
Operating Income 50.0 385.1 283.6 189.8
Interest Expense -20.0 -20.0 -19.6 -6.5
Interest And Investment Income 4.5 3.5 3.7 4.8
Other Non-Operating Expenses, Total -4.0
Gain (Loss) On Sale Of Investments 1.9
Other Unusual Items, Total -9.0 2.1
EBT, Including Unusual Items 30.5 359.5 267.7 192.2
Income Tax Expense 13.3 133.4 106.8 76.3
Earnings From Continuing Operations 17.2 226.1 160.9 115.9
Net Income 17.2 226.1 160.9 115.9
Net Income To Common Including Extra Items 17.2 226.1 160.9 115.9
Net Income To Common Excluding Extra Items 17.2 226.1 160.9 115.9

 

The net income within immediate 5 year period was at maximum in the 2011 year end at $226.1 million and as a result, the EPS was at $4.16 but the Return on Equity was highest at 65.75% in December 2010. The 2010 year was positively significant on some other counts as well, such as, Return on assets (19.36%), Gross Margin (37.2%), Operating Margin (13.1%) and Net Margin (7.44%). The Interest Coverage was at best at 30.68 in December 2009.

Financial Performance  Trailing 12 Months    Dec 2012 Dec 2011 Dec 2010 Dec 2009 Dec 2008
Revenue USD Mil

4145

3,609

3,205

2,163

1,670

1,365

Gross Margin %

28.4

27.2

36.3

37.2

35.4

33.3

Operating Income USD Mil

166

50

376

284

192

122

Operating Margin %

4.0

1.4

11.7

13.1

11.5

8.9

Net Income USD Mil

72

17

226

161

116

83

Earnings Per Share USD

1.19

0.29

4.16

2.96

1.98

1.32

Profitability Margins % of Sales            
Tax Rate %

35.81

43.73

37.10

39.91

39.72

36.86

Net Margin %

1.73

0.48

7.06

7.44

6.94

6.08

Asset Turnover (Average)

0.95

1.03

1.58

2.60

2.57

2.16

Return on Assets %

1.65

0.49

11.16

19.36

17.86

13.13

Financial Leverage (Average)

4.07

5.33

4.77

3.38

3.41

1.78

Return on Equity %

7.48

2.47

48.47

65.75

42.42

21.35

Return on Invested Capital %

3.88

0.38

27.18

30.94

27.19

19.03

Interest Coverage

5.19

2.53

18.95

14.64

30.68

 

Quarterly Earnings (Last 4 Quarters)

The revenue has constantly increased over the last four quarters. It is a 17% rise ($1,106.0 million on $945.2 million) over the Dec 2012 quarter end where as the gross profit percentage has risen by only 2.09% (28.48% in Sep 2013 and 26.39 in Dec 2012 %). Gross Profit was flat between the last two quarter ends because total revenues and other expenses between last two quarter ends were also almost same.

Amount in Million US$ Sep 30, 2013 June 30, 2013 March 31, 2013 Dec 31, 2012
Revenues 1,106.0 1,069.4 1,024.0 945.2
Total Revenues 1,106.0 1,069.4 1,024.0 945.2
Cost Of Goods Sold 791.0 753.5 726.9 695.9
Gross Profit 315.0 315.8 297.1 249.4
Selling General & Admin Expenses, Total 162.3 165.6 173.3 147.6
R&D Expenses 95.5 93.1 92.0 82.1
Other Operating Expenses, Total 257.9 258.7 265.3 229.7
Operating Income 57.1 57.1 31.8 19.6
Interest Expense -7.4 -7.5 -6.7 -5.0
Interest And Investment Income 1.0 1.5 1.0 4.3
Net Interest Expense -6.4 -6.1 -5.8 -0.7
Currency Exchange Gains (Loss) -1.2 -4.4 -4.0
EBT, Excluding Unusual Items 49.5 46.6 26.1 14.9
Other Unusual Items, Total -25.1
Other Unusual Items -25.1
EBT, Including Unusual Items 49.5 46.6 0.9 14.9
Income Tax Expense 17.7 17.2 -1.8 7.0
Earnings From Continuing Operations 31.8 29.5 2.7 7.9
Net Income 31.8 29.5 2.7 7.9
Net Income To Common Including Extra Items 31.8 29.5 2.7 7.9
Net Income To Common Excluding Extra Items 31.8 29.5 2.7 7.9
         

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