Jul. 18 at 9:24 PM
Everyone is talking about Netflix's weaker free cash flow this quarter.
But here's the context that matters.
Q2 free cash flow came in at
$1.53B, down from
$2.27B last year.
The decline wasn't because the core business suddenly got weaker.
Management said it was primarily driven by higher cash tax payments, including taxes related to the Warner Bros. deal termination fee, along with normal timing differences in cash payments. Despite the weaker quarter, Netflix reaffirmed its full-year free cash flow outlook of roughly
$12.5B.
One quarter doesn't change the bigger picture.
Netflix is still generating billions in cash every quarter, buying back shares aggressively, and expects another record year of free cash flow.
That's why I'm much more focused on the annual trend than one noisy quarter.
$NFLX