It’s been a long road for Netflix and its new owner, Amazon, and its most recent earnings report gave a glimmer of hope for the streaming service, which has been struggling to gain traction among consumers.
But the latest report from Netflix is a mixed bag.
Netflix is in the red as a whole, as its total subscriber count has dropped significantly over the past year.
The streaming service also reported a loss of $3.6 billion on revenue of $8.7 billion in the first quarter of 2018, down from $8 billion in Q1 2017.
Netflix said the revenue loss was primarily due to a drop in the number of subscribers it had added, but that it also saw revenue from the acquisition of movie rights and other revenue decline due to “subscription declines and an aging customer base.”
Netflix said that it expects to post adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) of $10.5 billion in 2019.
Netflix also expects to achieve positive free cash flow of $2.5 to $2,500 million in 2019, based on an estimate of $1.5 trillion in net debt.
Netflix will also report its third-quarter adjusted earnings per share of $0.23 to $0:27 on earnings before income taxes.
Netflix’s third-month adjusted earnings rose by 8% from Q1 2018, compared to Q2 2018.
Netflix was also up a quarter in adjusted revenue and earnings per subscriber.
The company’s adjusted EBITDA fell 6% from the previous quarter, compared with the same period in 2017.
However, the company said its free cash flows and adjusted Ebitda will grow by 4% to $3 billion and $2 billion, respectively, in 2019 and 2020.
Netflix has a cash position of $9.9 billion, down 9% from a year ago.
It said its quarterly adjusted EBOY of $6.2 billion and adjusted earnings after interest, tax, depreciation, amortisation (EbitDA) are both $2 to $4 billion.
In 2018, Netflix reported net income of $11.6 million on revenue $23.9 million, up 3% from $19.4 million in 2017 and the largest one-year increase since the company went public in 2003.
Netflix posted adjusted EIRP of $5.5 million on $23 million in net income, a 3% decrease from $7.1 million in 2018.
The analyst note said Netflix is expected to continue to be a positive business for the long-term.
“Netflix continues to be the most profitable and profitable company in the streaming ecosystem, with strong cash position, strong growth prospects and high growth potential.
Netflix continues to offer high-quality content, with customers increasingly looking for ways to access more content, including more original programming and new content, in their favorite content choices,” Netflix analyst Bob Deutsch wrote in a note to investors.
Netflix, however, will likely be a net negative in 2019 if it continues to report negative EBITDS.
Netflix says it is still in “a very challenging period” in the world of streaming.
“The world is changing fast, and as we look to the future, we recognize that we need to be flexible and adapt to change, and to the ever-changing demands of today’s consumer,” Netflix CEO Reed Hastings wrote in the earnings report.
“In order to compete with the fast-paced nature of today, we must be able to adapt, adapt to changing technology, and evolve to deliver a high quality and value proposition that meets today’s evolving consumer needs.
We are making significant investments to ensure we are able to continue doing this.
We have made significant investments in our delivery, delivery, and delivery, which is helping us deliver on our promises to deliver exceptional value to our customers.
We continue to make progress in this area, but are not yet ready to make a final decision on our future growth strategies.”
Netflix will report third-half earnings of $12.5 per share on revenue ($16.5bn) of about $16 billion, up 2% from 2018.