netflix q2 2016 earnings slides
TRANSCRIPT
Jan Dawson Chief Analyst (408) 744-6244 [email protected] @jandawson
NETFLIX Q2 2016 EARNINGS SLIDES
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• It’s one of about a dozen similar decks produced each quarter on major consumer tech companies
• The intention is to highlight trends and patterns which are not always obvious when merely looking at a spreadsheet
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INTRODUCTIONJACKDAW RESEARCH QUARTERLY DECKS SERVICE
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The charts in this deck are based on the company’s reported financial and operating metrics, together with other metrics derived from them by Jackdaw Research. While every effort has been made to ensure the accuracy of the data presented, and the absence of errors, we make no guarantee of accuracy and accept no liability for decisions made based on the information contained in this document. Readers should always consult the source documents if making financial or other decisions regarding the company concerned.
DISCLAIMER
4 Source: Netflix, Jackdaw Research analysis
CONSOLIDATED REVENUES$ MILLIONS
0
500,000
1,000,000
1,500,000
2,000,000
2,500,000
Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
5 Source: Netflix, Jackdaw Research analysis
REVENUESSPLIT BY SEGMENT – US STREAMING, INTERNATIONAL STREAMING, US DVD
0%
25%
50%
75%
100%
Q4 2011 Q3 2012 Q2 2013 Q1 2014 Q4 2014 Q3 2015 Q2 2016
US streaming Intl streaming US DVD
6 Source: Netflix, Jackdaw Research analysis
REVENUE GROWTHYEAR ON YEAR BY SEGMENT
-100%
0%
100%
200%
300%
Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016
US streaming Intl streaming US DVD
7 Source: Netflix, Jackdaw Research analysis
COMPANY MARGINS
-10%
0%
10%
20%
30%
40%
Q1 2011 Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
Gross margin Operating margin Net margin
8 Source: Netflix, Jackdaw Research analysis
CONTRIBUTION MARGINSBY SEGMENT
-60%
-45%
-30%
-15%
0%
15%
30%
45%
60%
Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
9 Source: Netflix, Jackdaw Research analysis
US STREAMING CONTRIBUTION MARGINLONGER TIMELINE
0%
5%
10%
15%
20%
25%
30%
35%
40%
Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016
10 Source: Netflix, Jackdaw Research analysis
SUBSCRIBER GROWTHYEAR ON YEAR GROWTH IN PAID SUBSCRIBERS, BY SEGMENT
-6,000
-3,000
0
3,000
6,000
9,000
12,000
15,000
Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
11 Source: Netflix, Jackdaw Research analysis
SUBSCRIBER GROWTHQUARTER ON QUARTER GROWTH IN PAID SUBSCRIBERS, BY SEGMENT
-1,000
0
1,000
2,000
3,000
4,000
5,000
Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
12 Source: Netflix, Jackdaw Research analysis
PAID SUBSCRIBERSAT QUARTER END, THOUSANDS, BY SEGMENT
0
10,000
20,000
30,000
40,000
50,000
Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
13 Source: Netflix, Jackdaw Research analysis
REVENUE PER MEMBERQUARTERLY REVENUE PER PAID SUBSCRIBER, $, BY SEGMENT
20
25
30
35
Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
14 Source: Netflix, Jackdaw Research analysis
PROFIT PER MEMBERQUARTERLY CONTRIBUTION PROFIT PER PAID MEMBER, $, BY SEGMENT
-60
-45
-30
-15
0
15
30
Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016
US streaming Intl streaming US DVD
15 Source: Netflix, Jackdaw Research analysis
FREE TRIAL SUBSCRIBERSNON-PAID MEMBERS AS % OF TOTAL SUBSCRIBERS, BY SEGMENT
0%
10%
20%
30%
40%
Q3 2011 Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming US DVD
16 Source: Netflix, Jackdaw Research analysis
MARKETING COSTSAS A % OF REVENUE, BY STREAMING SEGMENT
0%
20%
40%
60%
80%
100%
120%
Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming
17 Source: Netflix, Jackdaw Research analysis
MARKETING COSTSAS A % OF REVENUE, BY STREAMING SEGMENT, SHORTER TIMELINE
0%
10%
20%
30%
40%
Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming
18 Source: Netflix, Jackdaw Research analysis
MARKETING COSTSAS % OF REVENUES, TRAILING 4 QUARTERS, BY STREAMING SEGMENT
0%
10%
20%
30%
40%
50%
60%
Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming
19 Source: Netflix, Jackdaw Research analysis
MARKETING COSTS$ PER NET PAID SUBSCRIBER ADDED IN THE QUARTER
0
50
100
150
200
250
300
Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
US streaming Intl streaming
20 Source: Netflix, Jackdaw Research analysis
MARKETING COSTS$ PER NET SUBSCRIBER ADDED IN THE QUARTER, TRAILING 4 QUARTERS
0
10
20
30
40
50
60
70
Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016
US streaming Intl streaming
21 Source: Netflix, Jackdaw Research analysis
COST PER SUBSCRIBER, USANNUAL COST OF REVENUE PER US PAID STREAMING SUBSCRIBER, $
58
60
62
64
66
68
70
Q4 2011 Q2 2012 Q4 2012 Q2 2013 Q4 2013 Q2 2014 Q4 2014 Q2 2015 Q4 2015 Q2 2016
22 Source: Netflix, Jackdaw Research analysis
INTERNATIONAL STREAMINGQUARTERLY REVENUE AND COST OF REVENUE, $, INTERNATIONAL STREAMING
0
10
20
30
40
50
Q1 2012 Q3 2012 Q1 2013 Q3 2013 Q1 2014 Q3 2014 Q1 2015 Q3 2015 Q1 2016
Revenue per paid sub CoR per paid sub
Jan Dawson Chief Analyst (408) 744-6244 [email protected] @jandawson
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