Netflix announced plans to accelerate its international expansion, after adding 13 million new customers in the past year. The company reported growth in the fourth quarter ahead of its outlook, adding 4.33 million new streaming customers for a total 57.39 million.
Netflix said it's now profitable in its first markets launched outside the US. It will expand to Australia and Zew Zealand by March and more countries by the end of this year. Already available in 50 countries, Netflix said it expects it can grow profitably to around 200 markets worldwide by 2017, including China.
The international expansion and investments in content led to negative free cash flow of USD 78 million in Q4. Netflix still had USD 1.6 billion in cash at year-end and said it aims to raise around USD 1 billion this year in a debt offering.
The company's operating profit fell to USD 65 million in Q4 from USD 82 million a year earlier, while net profit rose to USD 83 million from USD 48 million, helped by a one-time tax gain of USD 39 million. In the US, Netflix posted revenues up to USD 917 million, in line with its outlook, and the margin improved to 28.0 percent from 23.4 percent in Q4 2013. Netflix aims to improve this to 30 percent in Q1, 32 percent in Q1 2016 and 34 percent in Q1 2017.
For the first quarter of 2015, Netflix expects another strong quarter of over 4 million net customer additions. Revenues will be up both in the US and abroad, while the operating loss at the international segment should reduce slightly compared to Q4. Net profit is forecast down to USD 37 million.
