8-KEarnings & ResultsExhibits & Filings

NETFLIX INC 8-K Report, Financial Results (Jul 21, 2014)

Filed July 21, 2014For Securities:NFLX

Summary

This 8-K filing from Netflix, Inc. (NFLX) on July 21, 2014, primarily serves to announce the company's financial results for the second quarter ended June 30, 2014. The report incorporates by reference a Letter to Shareholders (Exhibit 99.1) which contains these results and discusses a non-GAAP financial measure, 'free cash flow'. Management highlights free cash flow as a key liquidity metric indicating cash available for debt repayment, investments, and other activities. Investors should note that while free cash flow is presented as an important measure, the filing explicitly states it should be considered alongside, not as a replacement for, GAAP measures like net income and diluted earnings per share. The reconciliation of this non-GAAP measure to its GAAP equivalent is provided within the referenced Letter to Shareholders.

Key Highlights

  • 1Announcement of Q2 2014 financial results on July 21, 2014.
  • 2Inclusion of a Letter to Shareholders (Exhibit 99.1) containing detailed financial information.
  • 3Disclosure of 'free cash flow' as a non-GAAP financial measure.
  • 4Management's view of free cash flow as an important liquidity metric.
  • 5Emphasis that free cash flow should be considered in addition to, not as a substitute for, GAAP financial measures.
  • 6Reconciliation of free cash flow to GAAP equivalents available in Exhibit 99.1.
  • 7Filing is primarily informational regarding Q2 2014 performance and does not involve new material events beyond financial reporting.

Frequently Asked Questions

The main purpose of this 8-K filing is to announce Netflix, Inc.'s financial results for the second quarter ended June 30, 2014, and to provide the accompanying Letter to Shareholders.

Free cash flow is a non-GAAP financial measure that represents the cash generated by the company that is available to repay debt, make investments, and for other corporate activities. Netflix highlights it because management believes it's an important indicator of the company's liquidity.

Investors should interpret free cash flow as a measure of available cash after operational and capital expenditures, but it should be evaluated alongside traditional GAAP financial measures such as net income and earnings per share, as indicated by the company.

More detailed financial information, including the reconciliation of free cash flow to its GAAP equivalent, can be found in the Letter to Shareholders (Exhibit 99.1) which is incorporated by reference into this 8-K filing.