If the post office becomes the latest punch line to the old, "What's black and white and red all over?" quip, you can blame it on Netflix
The company's red, white, and black DVD rental mailers are getting around. As Netflix topped fourth-quarter projections and set its sights on landing its millionth subscriber over the next three months, the pioneer of unlimited DVD rentals seems to be doing just fine by more than just couch potatoes.
Quarterly revenue more than doubled to $45.2 million, as the company closed out December with 857,000 subscribers. While it posted a loss for the quarter, it closed out the year posting positive free cash flow in every reporting period for a sum of $15.8 million.
Sequentially speaking, the period was a success, with gross margins improving while the subscriber churn rate and customer acquisition costs ticked lower. Free cash flow was the only significant line item to fall, as the company readied its inventory levels for the holiday rush.
CEO Reed Hastings, who will be on The Motley Fool Radio Show this week, was confident that the company "will continue to dominate" the field it created. While Blockbuster
Wal-Mart's service apes the Netflix offering, but it's buried deep within its site and a victim of lousy new title availability. Blockbuster is several steps behind, seemingly convinced that the mail delivery of DVD rentals will be a niche market, at best.
Netflix doesn't see it that way. The company projects this year's revenue to climb by at least 54%, falling between $235 million and $255 million on cash flow of at least $40 million. As one of the many stocks discussed in the new Stocks 2003, Netflix has proven to be one of the few recession-resistant growth stories.
It's a good flick. Let's just hope it's not a dream sequence.