Netflix's video streaming service has surpassed 200 million subscribers for the first time as its expanding line-up of TV series and movies continues to captivate people stuck at home during the ongoing battle against
the pandemic.
The subscriber milestone highlighted Netflix's fourth-quarter results released Tuesday. The service added another 8.5 million subscribers during the October-December period, capping Netflix's biggest year since its inception as a DVD-by-mail service in 1997. Netflix ended the year with nearly 204 million worldwide subscribers.
The fourth-quarter gains easily topped the projections of the roughly 6 million additional subscribers projected by Netflix's own management and Wall Street analysts, even as the company began rolling out price increases of 8% to 13% in the U.S.
"Looking back over Netflix's 2020 results, it is still striking to see how the COVID-19 pandemic has been nothing but a major boon to the company's operations," Michael Nathanson, senior analyst at MoffettNathanson, told investors in a report. "As much of the world is still shuttered in their homes with nowhere to go and nothing to spend their money on, consumer adoption of streaming services has been accelerated by years."
Other analysts lifted their price target on the stock, with Oppenheimer citing the company's continued growth and rising profit margins.
The company earned $542.2 million on revenue of $6.64 billion in the fourth quarter, a relatively thin profit margin.
Netflix finally stopped burning through cash last year, largely because government restrictions imposed during the pandemic curtailed the production of programming. Netflix posted a positive cash flow of $1.9 billion during 2020, the first time it hasn't had a negative cash flow for an entire year since 2011.
In another breakthrough, Netflix predicted it will no longer need to raise additional cash from lenders to help finance its original-programming budget. The company said it doesn't expect to experience the same drain on its cash as it has for most of the past decade, even as it ramps up production of its original programming again and gears up to release at least one original film per week on its service throughout this year.
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