Because of Coronavirus, Netflix Is Profitable ... for Now
Surprising no one, Netflix (NASDAQ: NFLX) reported a massive surge in net new subscribers during the first quarter of 2020. Net additions were just shy of 15.8 million, more than double the outlook provided earlier in the year, bringing the streaming leader's total count up to 183 million. As many of those subscribers came in the final weeks of March, revenue "only" increased 28% year over year to $5.77 billion. The outlook for another 7.5 million net adds in the second quarter is likely a conservative one, given the ongoing lockdown on the global economy to slow the spread of COVID-19.
Looking beyond the headline, though, something far more interesting occurred on the bottom line. Netflix reported that it was free cash flow-positive in the quarter, and that should occur again in Q2. It's a departure from the way business was trending before, and just like the surge in subscriptions because of people being stuck at home, the newfound profits are due to coronavirus.
If this situation sounds confusing, it's because most headlines home in on earnings per share. And on that front, earnings have been positive at Netflix for a long time.
Source Fool.com
