How Much Money Did Netflix (NFLX) make in 2021?

The latest earnings show Netflix (NFLX) is not the money machine some investors believed.

For example, Netflix’s quarterly gross profit fell from $3.277 billion on 30 September 2021 to $2.470 billion on 31 December 2021. Additionally, the quarterly operating income fell from $1.755 billion on 30 September 2021 to $631.77 on 31 December 2021.

Moreover, the quarterly gross profit fell from $2.479 billion on 31 December 2020 to $2.470 billion a year later. Additionally, the quarterly operating income fell from $954.24 million on 31 December 2020 to $631.77 million on 31 December 2021.

Netflix is Making Less Money

Hence, Netflix (NASDAQ: NFLX) is making less money. However, Netflix’s quarterly revenues grew from $6.644 billion on 31 December 2020 to $7.709 billion on 31 December 2021.

Additionally, Netflix’s total assets grew from $39.28 billion on 31 December 2020 to $44.585 billion on 31 December. Thus, Netflix’s capacity to make money is growing even as income and gross profit fell.

Yet, Netflix has less cash. For instance, Netflix’s cash and short-term investments fell from $8.206 billion on 31 December 2020 to $6.028 billion on 31 December 2021.

Netflix is Still Burning Cash

Netflix (NFLX) is still burning cash. For example, it reported a quarterly ending cash flow of -$1.498 billion on 31 December 2021. The quarterly ending cash fell from -$183.41 million 31 December 2020.

Similarly, Netflix’s quarterly operating cash flow fell from -$137.67 million on 31 December 2020 to -$403.27 million on 31 December 2021. However, Netflix can generate enormous amounts of cash. For instance, there was an $8.436 billion quarterly ending cash flow on 31 March 2021.

However, the last positive cash flow was $82.38 million on 30 September 2021. Hence, Netflix cannot generate or retain cash.

Thus, many people will wonder why Netflix is burning cash and making less money. I suppose it could be the winding down of the pandemic.

Is Competition hurting Netflix?

Another reason Netflix (NFLX) is losing money is that it has more competition. For example, three major new streaming services; HBOMax, Paramount Plus, and Peacock emerged in the US over the past year. In addition, Disney+ has emerged as an enormous competitor to Netflix.

Besides competition, Netflix is having problems getting some programming. Many companies are reserving content only for their platforms. For example, the new Star Wars and Marvel shows only appear on Disney+ in the US. In addition, ViacomCBS (VIAC) pulled three Star Trek shows from Netflix in October 2021. ViacomCBS also yanked Star Trek: Discovery from Netflix outside the US.

ViacomCBS removed Star Trek from Netflix so it could limit the popular franchise to its Paramount Plus network. Moreover, ViacomCBS’s most popular new show Star Trek: Picard is only available on Paramount Plus.

Similarly, DC Comics’ cult hit Peacemaker is only available on HBOMax.

Netflix is feeling some pain, the streaming giant suffered its lowest rate of subscriber growth since 2015, TechCrunch claims. In detail, Netflix added 8.3 million subscribers in 2021 instead of the projected 8.5 million.

Netflix is Growing

However, Netflix’s worldwide paid subscriber base grew from 203.66 million in the fourth quarter of 2020 to 221.84 million in the fourth quarter of 2021, Statista estimates. Thus, I calculate Netflix added 181.18 million worldwide subscribers in 2021.

Thus, Netflix is still enjoying significant growth. However, the growth is occurring outside the United States. My prediction is that Netflix will shrink in the United States as people examine their streaming habits.

For example, Star Trek fans could limit their streaming budget to just Paramount Plus and Marvel fans could only watch Disney+. Similarly, sports fans could only watch ESPN+ or Peacock. However, I think Netflix will grow outside the US for the next few years.

Will Netflix’s Stock Collapse?

I think Netflix’s stock could collapse. Notably, Netflix (NFLX) fell from $539.04 on 1 February 2021 to $359.70 on 28 January 2022 to $429.48 on 2 February 2022.

I suspect the continuous share and market capitalization growth Netflix owners have enjoyed is over. Instead, I think Netflix’s share price and capitalization will shrink.

However, I suspect Netflix’s value, assets, and revenues will grow. Hence, Netflix could become a value investment in the near future.

The days of high share values at Netflix could be over. However, Netflix could soon become a moneymaking company and a value investment.