October 22, 2018
What’s $8 billion in debt?
Netflix Oct. 22 announced that it intends to offer, subject to market and other considerations, about $2 billion in bonds through two series of notes to qualified institutional buyers.
The interest rate, redemption provisions, maturity date and other terms of each series of the notes will be determined by negotiations between Netflix and the initial purchasers.
Netflix said it intends to use the proceeds from for general corporate purposes, which include content acquisitions, production and development, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.
The SVOD pioneer ended its most-recent fiscal period with $8 billion in debt, in addition to more than $18 billion in third-party content license obligations.
Of course Netflix can justify asking for money. It ended Q3 with subscriber growth of nearly 7 million, including 1 million in the United States – beating company projections.
The sub growth trumps any other SVOD service in the world. The service ended the period with 137 million subs, including 130 million paid.
The SVOD pioneer also generated nearly $4 billion in revenue, up 34% from the previous-year period of nearly $3 billion. Net income tripled to $403 million from $130 million last year.