Tech

Netflix says its cash burn will peak this year, then go down

Key Points
  • Netflix said in its earnings report Thursday its cash burn will peak this year.
  • For the fourth quarter 2018, Netflix said its free cash flow deficit swelled to $1.32 billion, compared with the deficit of $524 million a year ago. That's $3 billion in cash burn for all of 2018.
  • The company has long argued its cash burn is a long-term investment, since it owns its original content, which in turn drives more subscribers.
VIDEO5:1805:18
Netflix beat on earnings, but missed on revenues — Here's what six experts say to watch now

Netflix said its cash burn will peak in 2019 and likely drop off in coming years.

For the fourth quarter, the streaming giant said its free cash flow deficit swelled to $1.32 billion, compared with the deficit of $524 million a year ago. Netflix said that brings its cash burn up to $3 billion for 2018.

While Netflix projected its free cash flow to be similar this year, it also said it will "improve each year thereafter (assuming, as we do, no material transactions.)"

The company has long argued its cash burn is a long-term investment because it ultimately owns the rights to the original content produced, which in turn drives membership and revenue growth.

Netflix also reported better-than-expected profit on Thursday, but revenue fell short of expectations.

VIDEO3:5803:58
Netflix shares drop on mixed fourth-quarter earnings
Next Article
Key Points
  • The company beat Wall Street estimates for earnings per share, but fell just below projections for revenue. 
  • The company is guiding toward lower-than-expected results for the first quarter of 2019.
  • Subscriber additions for the quarter came in just above Wall Street estimates and the company's own projections.