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How Netflix is Capitalising On Operating Leverage
By The Good Investors  •  February 10, 2021
Netflix Inc (NASDAQ: NFLX) is ushering in a new era in its business. The streaming video giant delighted investors in January when it announced in its 2020 fourth-quarter earnings update that after years of burning cash, it is finally close to being self-sustainable Subscription video on demand (SVOD) as a business had previously been a highly contested topic among investors. Although there is no denying that there is product-market fit, Netflix has burnt through billions in cash to build original content each year, raising questions about the unit economics of the business model.  But cash-burn may soon be a thing of the pass for the undisputed king of SVOD.  For 2021, Netflix said that it anticipates free cash flow to be around break-even. It is so confident in its ability to be self-sustaining that it plans on repaying some of its bonds and even toyed with the idea of...
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By The Good Investors
We are Chong Ser Jing and Jeremy Chia, and we started The Good Investors in the aftermath of The Motley Fool Singapore’s closure in late 2019. We both have a passion for stock market investing and believe deeply in enriching society through our investing activities. One way we can do so is through investor-education. The Good Investors is our personal investing blog and will serve as a free platform for both of us to openly share our investing thoughts with you.
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