8-KEarnings & ResultsExhibits & Filings

NETFLIX INC 8-K Report, Financial Results (Oct 20, 2010)

Filed October 20, 2010For Securities:NFLX

Summary

Netflix, Inc. filed this 8-K on October 20, 2010, to announce its financial results for the third quarter ended September 30, 2010. The filing includes a press release and management commentary detailing these results. A key aspect of the announcement is the disclosure of non-GAAP financial measures, specifically non-GAAP net income and free cash flow, which the company believes offer valuable insights into operating performance and liquidity by excluding certain non-cash or non-operational items. Investors should note that while these non-GAAP measures are presented, Netflix emphasizes they should be considered alongside, not as a substitute for, GAAP-based financial figures like net income and net cash provided by operating activities. The company provided these supplementary measures with consistent methodology across reporting periods to aid in understanding its financial health. The full details of the financial performance and management's perspective are available in the referenced exhibits.

Key Highlights

  • 1Netflix announced its financial results for the third quarter of 2010.
  • 2The company is providing non-GAAP financial measures, including non-GAAP net income and free cash flow.
  • 3Non-GAAP net income excludes the non-cash impact of stock option accounting.
  • 4Free cash flow is presented to offer a view of liquidity, excluding non-operational cash flows from investments and financing activities.
  • 5Netflix cautions that non-GAAP measures should be viewed in conjunction with, and not as a replacement for, GAAP measures.
  • 6The company has consistently applied the methodology for its non-GAAP measures.
  • 7The full financial details are available in accompanying press release (Exhibit 99.1) and management commentary (Exhibit 99.2).

Frequently Asked Questions

This 8-K filing serves to announce Netflix's financial results for the third quarter ended September 30, 2010. It includes a press release and management commentary that provide details on the company's performance during the quarter.

Netflix is reporting non-GAAP net income and free cash flow because management believes these measures offer additional useful insights into the company's operating performance and liquidity. Non-GAAP net income excludes stock-based compensation expenses, and free cash flow excludes certain investment and financing activities, which they feel better represent the core operational cash generation.

Investors should interpret these non-GAAP measures as supplementary information. Netflix explicitly states that these figures should be considered in addition to, and not as a substitute for, or superior to, the standard GAAP financial measures such as net income and net cash provided by operating activities.

Yes, Netflix states that the non-GAAP information is presented using a consistent methodology from quarter-to-quarter and year-to-year, allowing for comparable analysis over different periods.