Netflix Inc.

Fundamentals

If any of the information we just covered feels like a surprise, in many ways it is. Our purpose is to provide institutional research to all investors and break the information monopoly held by the top .1%.

PREFACE
The real story surrounding Netflix’s future is so far off the beaten path of headlines that it reads like a science fiction novel. But it's real, and it's happening right now.

For now, we'll stick with the current state of affairs, and how Netflix has become the undisputed, worldwide leader in streaming video on demand (SVOD). At the very end, we'll touch on the disruption that the firm is on the brink of beginning.


CHART 1: REVENUE
The street expects revenue growth, and at a rather torrid pace. Here is our first chart that demonstrates Netflix's growth: Revenue



That's $6.8 billion in revenue in the trialing-twelve-months, up 23% year-over-year. That wall of revenue is expected to rise:

Current First Call estimates forecast revenue of $8.77 billion for 2016 and $11 billion by 2017. That's 29% and 26% growth year-over-year, respectively. That's right, expectations are for revenue growth acceleration.

CHART 2: REACH
Netflix started as a regional company, breaking into and opening up the space that is now so well known as SVOD. Today Amazon (NASDAQ:AMZN) Prime, Alphabet (NASDAQ:GOOGL) Google's YouTube Red and even Apple's (NASDAQ:AAPL) TV are starting to make waves. But as of today there is one king and it's Netflix.



The bright green areas are the newest additions to the Netflix family of nations we learned about at CES this January. That's 130 countries.

CHART 3: MARKET SHARE
As Netflix grows, let's recall how deep a footprint it has made for itself in the United States.



With just 48% of US households having access to streaming video on demand (SVOD), Netflix has over 90% penetration while Amazon is at 40%.

CHART 5: CONSUMPTION
Goldman Sachs came out with research that was just jaw dropping. Back in 2009, the average Netflix subscriber watched about 5 minutes a day. The average subscriber now watches nearly two hours. Here's the chart:



When consumption rises that quickly, Netflix has established pricing power, and that's exactly what we're seeing -- prices are going up and no one is canceling.

CHART 5: SUBSCRIBER FORECASTS
Netflix reported 1.56 million new US subscribers and 4.04 million more international subscribers in its latest earnings release. Here is the chart of worldwide subscribers from our friends at Statista:



More subscribers at higher prices watching more Netflix than ever before -- that's quite a growth story.

CHART 6: DEBT
With a massive international expansion and a flood of original content, the company reiterated its plan to spend $1 billion in cash and to turn to the debt markets for the capital. In fact, Netflix's Chief Content Officer Ted Sarandos told The Verge at CES (emphasis added):


Now, here is Netflix's all-time debt chart:



Debt now stands at $2.4 billion, up 168% from last year ($886 million).

WHY THIS MATTERS
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