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Sep 30, 2021
Netflix Q3 2021 Earnings Report
Revenue grew, operating income rose, and paid memberships increased due to a stronger content slate.
Key Takeaways
Netflix's Q3 2021 earnings revealed a 16% year-over-year revenue increase to $7.5 billion and a 33% rise in operating income to $1.8 billion. The company added 4.4 million paid net memberships, reaching a total of 214 million.
Revenue increased by 16% year over year to $7.5 billion.
Operating income grew by 33% compared to the prior year quarter, reaching $1.8 billion.
Netflix added 4.4 million paid net memberships, ending the quarter with 214 million.
APAC region was the largest contributor to membership growth with 2.2m paid net adds.
Netflix
Netflix
Netflix Revenue by Segment
Netflix Revenue by Geographic Location
Revenue by Segment
UCAN Revenue
CapyFin.comEMEA Revenue
CapyFin.comLATAM Revenue
CapyFin.comAPAC Revenue
CapyFin.comRevenue by Geographic Location
UCAN Revenue
CapyFin.comEMEA Revenue
CapyFin.comLATAM Revenue
CapyFin.comAPAC Revenue
CapyFin.com Forward Guidance
For Q4’21, Netflix forecasts paid net adds of 8.5m, consistent with Q4’20 paid net additions. For the full year 2021, the company forecasts an operating margin of 20% or slightly better. Q4’21 operating margin will be approximately 6.5% compared with 14% in Q4’20 due to the backloaded big content release schedule.
Positive Outlook
- Paid net adds of 8.5m, consistent with Q4’20 paid net additions.
- Full year 2021 operating margin of 20% or slightly better.
- Strongest Q4 content offering yet.
- Expects to be FCF positive on an annual basis in 2022 and beyond.
- Anticipate a more normalized content slate in 2022.
Challenges Ahead
- Q4’21 operating margin will be approximately 6.5% compared with 14% in Q4’20.
- Year over year decline in operating margin is due mostly to backloaded big content release schedule.
- Roughly 19% year over year increase in content amortization for Q4’21.
- Q4 ‘21 FCF to be negative.
- Full year 2021 FCF to be approximately breakeven.
Revenue & Expenses
Visualization of income flow from segment revenue to net income