Netflix Hits a Homer: Fool by Numbers

On Jan. 24, Netflix (Nasdaq: NFLX) released Q4 2005 earnings for the period ending Dec. 31.

• In the fourth quarter, subscribers increased 60% to 4.2 million.
• The company nearly doubled its operating cash flow during the quarter.
• Shares were up almost 16% for the day after the announcement.

(Figures in thousands, except per-share data)

Income Statement Highlights

	Avg. Est.	Q4 2005	Q4 2004	% Change
Sales	$194,620	$195,040	$143,893	+35.5%
Net Profit	--	$38,114	$5,569	+584.4%
EPS	$0.15	$0.57	$0.09	+533.3%

Get back to basics with a look at the income statement.

Margin Checkup

	Q4 2005	Q4 2004	% Change
Gross Margin	47.08%	45.49%	+1.59%
Op. Margin	3.82%	3.26%	+0.56%
Net Margin	19.54%	3.87%	+15.67%

Margins are the earnings engine. See how they work.

Balance Sheet Highlights

Assets	Q4 2005	Q4 2004	% Change
Cash+ ST Invest.	$212,256	$174,461	+21.7%

Liabilities	Q4 2005	Q4 2004	% Change
Accounts Pay.	$63,491	$49,775	+27.6%

Cash Flow Highlights

	Q4 2005	Q4 2004	% Change
Cash From Ops	$63,732	$32,537	+95.9%
Capital Expend.	$12,414	$6,941	+78.9%
Free Cash Flow	$51,318	$25,596	+100.5%

Find out why Fools always follow the money.

Related Companies:

• Blockbuster (NYSE: BBI)
• Wal-Mart (NYSE: WMT)
• Amazon.com (Nasdaq: AMZN)
• Best Buy (NYSE: BBY)
• Time Warner (NYSE: TWX)
• Movie Gallery (Nasdaq: MOVI)

David Gardner of Motley Fool Stock Advisor has selected Netflix three times in his investment service. The selection has crushed the market all three times. Best Buy is also a Stock Advisor recommendation.

Related Foolishness:

• Foolish Fundamentals: Valuation
• Foolish Fundamentals: The Income Statement
• A 25-Bagger in Five Years

Fool by Numbers is designed to give you the raw earnings information in a timely fashion, putting all the numbers you need in one easy-to-read place. But at The Motley Fool, we believe numbers tell only part of the story, so check Fool.com for more of our in-depth discussion of what the numbers mean.

At the time of publication, John Reeves owned shares in Netflix. Fool rules are here.