Netflix on Tuesday topped subscriber growth expectations in the past quarter, keeping ahead of new streaming rivals competing for viewers stuck in their homes during the coronavirus pandemic.
The streaming television leader added some 8.5 million paid subscribers in the quarter to reach 203 million, topping 200 million despite recent price hikes, its quarterly earning update showed.
“COVID-19 has accelerated that big shift from linear to streaming entertainment,” Netflix chief financial officer Spencer Neumann said on an earnings call.
“So, the underlying long-term looks good.”
The company’s cash flow was so strong that it will no longer borrow money to pay for operations, and is considering starting to buy back shares, according to a letter to investors.
Profits dipped to $542 million in the fourth quarter, compared with $587 million in the same period in 2019. But overall revenue in the quarter surged 21.5 percent to $6.6 billion.
For the full year, Netflix added a record 37 million paid memberships, according to the earnings report.
“We’re enormously grateful that in these uniquely challenging times we’ve been able to provide our members around the world with a source of escape, connection and joy while continuing to build our business,” Netflix said in a letter to investors.
Paid membership increased 23 percent in the final quarter of 2020 when compared with the same period a year earlier, but average revenue per membership was flat, according to the Silicon Valley-based company.
While Netflix raised rates slightly in the US late last year, the majority – some 83 percent – of its new subscribers were from outside North America, the earnings report indicated.