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Netflix CFO Has No Regrets After Spending $6 Billion On Content $NFLX

Netflix CFO David Wells told a room full of attendees at the Goldman Sachs ‘Communacopia’ Conference in NY that the company has no regrets spending $6 billion on content this year, despite the company’s $4.8 billion debt.

While Netflix has been criticized by analysts for their “free spending ways,” especially on original content, Wells says the cash outlay has been worth it, considering the streaming giant’s 104 million users worldwide.  made massive financial bets on Emmy nominated content which appear to be paying off.

“You could decide to invest everything and more into content, so we have some discipline reserve for growing operating margin at this point,” Wells said.

Subscriber growth has been booming too, with over 100 million customers:

“Just a headline: If we’re able to grow the top line, we’re going to be guided by steady growth of operating margin and reinvest what’s left into content,” he said.

“For a while, we were not budget-constrained, we were project-constrained,” Wells continued. “We might be to the point where we might start seeing more budget constraint. That has some benefits in terms of helping drive discipline on the content line.”

Of note, Netflix original content is getting better ratings, on average, than licensed shows from legacy networks

Courtesy Business Insider

Yes, they have a ton of debt. Yes, their P/E of 223 is at Amazonian levels – their closest competitor. But they’ve been crushing user growth estimates and guidance while falling in line on revenues / eps.

Variety reports that Netflix’s spending budget could increase to $7 billion next year.

Exodus nails $NFLX

While Netflix is currently trading well above the “Oversold” level within iBankCoin‘s Exodus service, keep an eye on it… 8 out of the last 8 times it flagged oversold, $NFLX returned 14.11% within 7 days.

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7 comments

  1. mongoosereflexes

    You trade stocks?

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  2. zeropointnow

    Yep

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  3. fryguy15

    Word. You seem like you short stocks (no Bluestar)

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  4. fryguy15

    So NFLX weeklies?

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  5. mongoosereflexes

    Been in NFLX since $49, looking for 200 exit

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  6. zeropointnow

    I trade like a pussy. Right now 50% cash, 30% bonds w/avg mat of 4-5 ys, 20% stocks, no shorts. I also manage a small book of mostly old clients who need fixed income. The boringest shit you could imagine.

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  7. sarcrilege

    $NFLX $4.8 billion debt will be a bitch to service once interest rates start rising and they dont have the subscriber base to support it.

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    • 0 Deem this to be "Fake News"

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