Volvo and Autoliv team up with Nvidia for self-driving cars
Swiss Trade Balance May 2017: Foreign Trade is Strengthening #SwissMacro
ACDF Architecture completes home for two sisters beside Canadas Lake Memphremagog:
World in Pictures
Germans not opposed to same sex marriage
Anti #Maduro protests in #Caracas #Venezuela #AA
The automated teller machine or ATM turns 50 today: Happy Birthday!!
Margaret Thatcher knew that without security there is no prosperity
RT @LPtravelnews: Revealed: the top 20 countries for best quality of life in the world
Governor Johos Call Stopped Me from Dumping Zari - Singer Diamond: #Tanzania
Our @Fintech5Podcast w/ @GCGodfrey who is keynoting today at #Money2020Europe #money2020EU
I had forgotten about this. So thoroughly weird.
Sweden, UK Denmark have high poverty rates but low persistent poverty - #NotSoBad @ONS
Justices in Tigo Shares Case Refuse to Opt Out: #Tanzania
Financial Support Lures Women to Disclose HIV Status: #Uganda
Questions and answers about the #US Supreme Courts decision on #Trumps #travelban
The children of Camorra gangsters
Bungee instructors terrible English blamed for girl leaping to death
What happens now after the U.S. Supreme Courts travel ban ruling?
Nobel Prize–winning economists come out against Senate GOP healthcare bill
It is high time to localise the energy transition
US judge blocks deportation of hundreds of Iraqis held in immigration sweeps
27 June 1905: Russian battleship Potemkin in the hands of mutinous crew.
How Israel gains from Egypt-Saudi Red Sea islands deal
NAFTA’s Market Growth Increases to 21 Month High in June. #SMI
Bitcoin, Ether lead digital currency slide from highs via @CamiRusso
Sleeping woman swallowed by sinkhole in central #China - her bedroom collapsed in heavy rain
Will some things change with newer generations? Today’s cartoon by @elchicotriste0:
Nigeria, Mexico Trade Volume Hits U.S.$600 Million #Nigeria
South Africa Takes Steps to Halt Spread of Bird Flu #SouthAfrica
Athens slams Tirana square makeover as ‘concealing irredentism’
Namuganza and Nantaba - Who Should Museveni Beat With His Stick?: #Uganda
Ugandan Singer Bobi Wine Arrested in Kasangati #Uganda
German 10y yields jump to 0.28% on hawkish Draghi speech.
Trump son-in-law Kushner hires prominent trial lawyer: NYT
Boxer crabs go to crazy lengths to keep a pair of pom-poms
The 25 most beloved CEOs in America
New CBO report could doom GOP healthcare bill:
U.S. threatens Syria, says Assad is planning chemical weapons attack
What price attention? How data harvesters are changing our minds
European law permits them to be thrown out now.
Train #travel tips for all coming to #France this #summer from @TheLocalFrance
There are now 2.1 million apps in the iPhone App Store — up from 500 in 2008.
Minerals produced by Base Titanium are used as inputs to a variety of diverse industries and products.
Does One Belt, One Road make commercial sense?
Majorities around the world think of Trump as arrogant, intolerant and dangerous
Refugee Summit Leaves Uganda Still in Need Over U.S.$ 1 Billion: #EastAfrica
*DRAGHI: DEFLATION RISK NOW PRICED OUT OF INFLA EXPECTATIONS
To Elisa from Italy Thanks for the excellent tiramisu! #gratitudeproject cc @OxfordAOPP
South western France placed on alert for violent storms
US judge blocks deportation of hundreds of Iraqis held in immigration sweeps
Top US senator threatens to block arms sales to GCC countries over Qatar row
Kurodas still buying Japanese bonds
Denmark is killing Tesla (and other electric cars)
Stormy conditions with flash flooding and hail will threaten #Germany into Wednesday:
10 SP 500 health-care companies with the highest percentages of “buy” ratings:
Witnesses Report Sinking Ship After Explosion: #Somalia
Global business confidence remains very strong in June. #SMI
#Norways $960bn sovereign wealth fund urges banks to disclose #carbonfootprint of loans
A video of the explosion in Kiev that killed a military man as he was driving a Mercedes
H/T @GuyJohnsonTV
Draghi: a tapering is not a tightening. Say what you want, the President rocks at communication.
Israel bombs Gaza after rocket fire
Top CNN employees resign after network retracts Trump-Russia story
#Norway heads the table for the availability of charging positions for plug-in EVs #OOTT
Museveni Cancels Multi-Billion Chinese Mining Deal Over Bribe: #Uganda
Swede Held by Al-Qaida Freed After 6 Years: #Mali
Oh hello @ConversationCA
Bloomberg View: Europes banking union fails its latest test via @BV
Advisers concerned over poor communications with FCA
Social media giants step up fight against extremist content
Albanias Socialists take full control of parliament for first time since communisms end
Russias Rosneft targets bigger gas output, lower costs
The Italian bank CEO winning big from collapse of Veneto lenders
Equity and bond investors are split on the prospects for Baidu
Swede Held by Al-Qaida Freed After 6 Years: #Mali
Nice visualization of Chinas recent deleveraging efforts, via Deutsche Bank:
RUSI Director @kvonhippel welcoming delegates and CGS to the #RUSILWC
Europe was never keen on Bush, loved Obama, hates Trump
With Alphabet, Google faces a daunting challenge: organizing itself
China’s latest logistics IPO is hard to unpack
California to list glyphosate as cancer-causing; Monsanto vows fight
Did Corbyn have the right approach to Brexit after all?
Chinese Premier Li says China will meet it growth goals and pledges free trade support
School secession is segregation
Lightning bolts illuminate the sky above Annaberg-Buchholz in Saxony, Germany on June 22nd (DPA/Andre März)
Japan Pension Fund Manager Shows the Struggle for Abenomics: via @business @tomredjp
Armyworm Still Wreaks Havoc On Maize: #Ethiopia
Inside #Monopolys secret war against the Third Reich: @eurogamer #longreads
Economy Min Papadimitriou invites foreign entrepreneurs to #invest in food sector #Greece
#Colombias #FARC disarmament confirmed by United Nations
White House: Assad is potentially preparing another chemical attack in Syria
Pakistan’s illegal kidney trade is propped up by poor and wealthy
Trump urges @narendramodi to relax Indian trade barriers in maiden meeting
Time to stock up those Norwegian salmons.
Eleven of them now
Heineken offers to sell pubs to ease competition worries on Punch Taverns takeover
Mexico: Market Growth Index increases to the highest level in 17 months in June. #SMI
Throw a few more cajas on the pile
Museveni to Face Off With Besigye in Kyadondo: #Uganda
#Russia Corporate Profits at RUB3.2T
Arnold Lobels “Frog and Toad” endures as an amphibious celebration of same-sex love:
U.S. threatens Syria, says Assad is planning chemical weapons attack
And you thought the SP 500 Index was expensive! #smallcaps via @Callum_Thomas
Beyond Demographics: A New Way of Looking at Cities
Fires being brought under control in #Huelva #Andalucia #Environment
haha, amazing that ZeroHedge I love Dick take place in Marfa, Texas @alexandrascaggs
Climate change will make your coffee cost more and taste worse
Players Remember Marc Vivien Foe As They Leave Russia: #Cameroon
#Italy Business Confidence at 107.3
#Italy Consumer Confidence at 106.4
How humans can stay ahead of machines, according to Alibaba founder Jack Ma via @CNBC
Dems hold sit in on Capitol steps to protest GOP ObamaCare repeal bill
#Bulgaria Tourist Arrivals year-on-year at 7.2%
Will Tanzania Keep Street Named After Wanyama ? #Kenya #Tanzania
Security software player Trend Micro launches $100m venture fund
#Germany tells Erdogans bodyguards to stay away from #Hamburg #G20
Tag your best friend tell them what you value most about your friendship!
A timeline of Colombia’s peace process.
Children in Stalingrad hiding from bombing by German planes. 1942. Photographer L.I. Konov.
Highway in the sky! Chongqing residents drive on road built on rooftop
#Myanmar troops on high alert after spate of attacks blamed on #Rohingya insurgents
Investors await Bank of England report and Yellen appearance in London
Canadian soldier becomes first female infantry officer to captain UK queens guard
Brazil Food Price Index for June: 151.5, previous: 154.9 (change: -2.2%) #WPI
DOF Subsea wins pair of new contracts
Former PM Valls quits Socialists to join Macrons army of MPs in parliament
Greek owners stump up extra cash for state budget
Golden Energy awarded PSV contract by Total
#Libya #Libyaoil Petroleum Economist map of Libyas current oil/military dispositions tangle.
IN PICTURES: Modi meets Trump - Click
MUST WATCH: Uber vehicle set on fire as antibodies take to the streets -
Fox News reporter to Sean Spicer: The American people expect transparency
Ugandan Muslim Leader Tells Govt to Spend Less On Weapons #Kenya #Tanzania #Uganda
#ECB to stay loose for a very long time: HSBCs Major via @markets
Former Prime Minister Summoned By Police Over Uknown Reasons: #Tanzania
#Ethiopia: East Africas new economic power
Kenya reconciliation faces major election test: (@irinnews)
Troops in Myanmars Rakhine on high alert after killings of Rohingya
PES president: Unlike EPP, socialists do not impose decisions on member parties
Two arrested in Swiss anti-terror operation
Police arrest drug mule colleague
Sanders ignores Fox News question about FBI probe of his wife
Boy travels 230km from Morocco to Spain clinging under bus
guys weve been found out
Chinese blockchain salaries @ReutersGraphics
U.S. to list China among worst human trafficking offenders -sources
Worlds biggest wealth fund is refusing to be silenced: @ScouseView via @gadfly
One in five flights to popular holiday destinations are delayed by more than 30 minutes
Zimbabwe Warriors Massacre Mozambiques Os Mambas #Mozambique #Zimbabwe
U.S. judge halts deportation of Iraqis nationwide
Trolls Penis to be re-erected in Norway
Fresh landslide at site of disaster in #China
Good News as Worlds Whale Population Increases: #SouthAfrica
#JohnnyDepp may face perjury charge in #Australia over war on terrier
China customs mulls increasing checks on #thermalcoal imports, impeding flow, traders say
Burning bones helped prove that women were poisoned by glowing paint
At platform 9-3/4, Harry Potter fans mark 20 years of magic
The trash heap phenomenon
Nestles first activist investor may trigger more divestments
PM steps in in row between ministry and trash collectors
#Sweden Balance of #Trade at SEK 2.8B
Celebrate Labours electoral success - but dont forget the working class, writes @lisanandy
FBI questions Trump campaign adviser multiple times in Russia investigation: report
60-year-old Arkansas prison escapee recaptured after more than three decades on the run.
#Sweden PPI year-on-year at 7.2%
Founder of fintech platform being used in 95 countries shares his expansion strategy
The passive investing revolution is leaving opportunities in its wake @MylesUdland
#Sweden PPI month-on-month at 0.0%
Global yield curve flattening continues. German 2s/10s yield spread drops below 86bps.
Amendment for hirings in municipal sanitation services tabled in parliament #Greece
FM @NikosKotzias to participate in conference on #Cyprus issue in #Switzerland #Greece
RT if you owned this ball...
Debenhams warns of market volatility as sales fall
Germany brands Arab states’ Qatar demands ‘very provocative’
Tell @Apple, @SamsungMobile, @LGUSAMobile to give us repairable and long lasting products!
Want a laptop thats easy to repair? Look beyond Apple and Microsoft
Boniface Mwangi, Betty Kyallo, Victor Wanyama Scoop Social Media Awards: #Kenya
The 9,000-year-old history of booze, in photos
Ini adalah lokasi jebolnya tanggul lubang galian tambang batubara di Kalimantan Selatan beberapa hari lalu.
Most Australian residents born overseas are now from Asia, rather than Europe
Janchart takes its second handy bulker this year
Alec Baldwin will return to SNL as Trump
Merkel softens her opposition to gay marriage
Frenchwoman on trial for helping migrant lover smuggle into Britain
Save the Whale Campaigns Working, South African Summit Hears #SouthAfrica
Albanias Socialists take full control of parliament for first time since communisms end
Follow the Margaret Thatcher Conference on Security with CapX
The @WhiteHouse claims Bashar al-Assad planning Syrian chemical weapons
Police fired tear gas at LGBTQ supporters to enforce a ban on Pride parades in Istanbul
Another U.S. tech company shuns #Brexit fears with London office via @NateLanxon
Commission laments member states’ lack of ambition on energy saving laws
Why Nigerias Akinwunmi Adesina Won 2017 World Food Prize: #Nigeria
A little to the left. @roweafrs latest cartoon. For more: #auspol
Where the arts really make a difference might surprise you
Donald Trump, please kill Americans not more Syrians, signed- MAGA dipshits
Israel bombs Gaza after rocket fire
June 27, 1941 – Romania launched a pogrom in the city of Iaşi, resulting in the murder of at least 13,266 Jews.
No, the Fed didnt make a mistake by hiking interest rates via @BV
Huckabee hits Senate GOP healthcare bill: This isnt what Trump campaigned on
The ATM turns 50 - It all began with a newfangled bank machine in Enfield
British consumer confidence is now back at post-referendum levels
Last time short selling of #Lonmin was this high, it had an emergency rights issue #platinum #METL
UK royals to receive tax funding boost
Wall Street really hates giving any stock a ‘sell’ rating
Theres a safe and secure way for Chinese millennials to buy homes abroad
At platform 9-3/4, Harry Potter fans mark 20 years of magic
Italian Banking – Domino’s Just Started Falling - What is coming next?
@Renegade_Inc
@tracyalloway
Why Goldman Sachs pays such a high savings account rate
Fly Hi: Marine travel in the digital age #shipping
Peter Montalto: Rand to trade stronger, for now, but huge shocks lie in wait
Best and worst broadband speeds in UK revealed - but how does your area fare?
#Denmark Retail Sales month-on-month at 0.5%
Deutsche Bank growing more cautious on Gulf assets... Watch this space.
#Fintech in Hong Kong 2017 Startup and Ecosystem Report #vc
#Denmark Retail Sales year-on-year at 1.6%
Cyber Threat - Nigeria, 4 African Nations Among Worlds 10 Riskiest Countries: #Nigeria
13 Chinese sentenced to death for drug offences as thousands look on in public trial
Trump officially nominates new FBI director
Korean ports to offer alternative maritime power #shipping
GeoSea secures offshore wind installation work - Splash 247
How Singapore makes biodiversity an important part of urban life
Rowan lays off another 50 workers due to drillship cancellation
GeoSea secures offshore wind installation work
RT @shipping_latest: VLCC ordering scales heights not seen since 2008 #shipping
Chinas growth looks like it may already have hit its peak for 2017
EU to charge PPC with abusing position
It’s no coincidence
Ecuadors President grants pardon to 4 indigenous activists.
A storm chaser talks about the most dangerous storms of her career
Boxship master lays the blame for deadly collision on USS Fitzgerald officers #shipping
JAXPORT harbour-deepening project approved #shipping
Were creating a Facebook group to talk about American politics and we need your help
@thefreakywave reacts to news that the lifespan of ships is set to get younger #shippingnews
White House: Assad regime preparing for another chemical attack in #Syria -
Ugandan Scholar Seeking Kenyan Lover Boy to Marry Her: #Uganda
Lula leads Brazil presidential poll ahead of court sentence
MMA vs tai chi group brawl stopped by police in Shanghai
Blue Apron is among the IPOs estimated to bring in an aggregate $1.1 billion this week
Liquidation of Italian banks shows limits of banking resolution rules
This 3D-knit chair is made from a single piece of technical fabric
Key GOP senator: I dont have enough information to vote for ObamaCare repeal
Spacex had two successful launches in one weekend and has new titanium fins able to handle…
Cold, hard cash remains king in the digital age for one simple reason
Kyiv police confirms: driver is dead via @NPU_GOV_UA
How Italy’s bank rescue rewards investors’ political bets
Drones arent missiles, so dont regulate them like they are:


Tyler Durden
Netflix Misses On Subs, Guides Lower; Burns $422 Million But Is Optimistic Thanks To Adam Sandler
2 months ago




Last quarter investors forgot the negative cash-flow, forgot the soaring cost of content, forgot the rampant competition, and forgot fact that Netflix slashed its domestic subscriber growth expectations, and just bought-the-f##king-record-high because international subscriber growth soared. This quarter, however, they may be less gullible because that surge in international subscribers not only did not happen, but missed by a whopping 370K subs, missing both the street forecast of 3.9 million and the company's own guidance of 3.7 million. Adding to the pain, domestic subscribers of 1.42 million also missed consensus of 1.59 million and the company's forecast of 1.5 million.

Then, unlike last quarter, NFLX's outlook was far less euphoric, and the company now sees Q2 EPS of 15c, 8c below consensus. Revenue was also fractionally below expectations with the company expecting sasles of 2.755BN in Q2, below the 2.76BN est.

Results summary:

  • 1Q revenue $2.64b vs est. $2.65b
  • 1Q GAAP EPS 40c vs 37c
  • 1Q domestic streaming net adds 1.42 million, vs consensus est. 1.59MM vs company forecast 1.5MM
  • 1Q international streaming net adds 3.53MM consensus est. 3.90m vs company forecast 3.7MM
  • 2Q GAAP EPS forecast 15c vs est. 23c
  • 2Q revenue forecast 2.755BN  vs est. $2.76BN

The only silver lining in the report: Q2 subscriber additions, both domestic and international, are expected to once again come above consensus estimates.

  • 2Q domestic streaming net adds 600K, est. 420.5k
  • 2Q international streaming net adds 2.6 million est. 2.1MM

However, considering this quarter's bad miss on guidance, will investors believe it?

Some additional details from the report:

  • Due to content (primarily House of Cards season 5) moving from Q1 to Q2, we had higher operating margins in Q1 (as forecasted) at 9.7% than our plan for the year (about 7%). We forecast operating margin at 4.4% in Q2, placing us on track to reach our 7% target for the full year.
  • The other effect of the content moves is lower net adds in Q1 compared to prior year (as expected) and heavier net adds in Q2 compared to prior year (about double). We have come to see these quarterly variances as mostly noise in the long-term growth trend and adoption of internet TV. For the first half of this year, for example, we expect to have 8.15 million net adds, compared to 8.42 million net adds in the first half last year
  • International net additions decreased 22% year over year, as we lapped our January 2016 launch of over 130 countries, and the accompanying early surge demand, in Q1 2016.

And then this:

For the last several years we’ve had flat operating margins due to established markets funding international expansion with every spare dollar we had. Because of that, the major indicators of our progress were member and revenue growth and US contribution margins. Starting this year, we can be primarily measured by revenue growth and (global) operating margins as our primary metrics.

Just not cash flow.

And speaking of the one thing that nobody dares talk about, the company's unprecedented cash burn, in Q1 the company burned $422 million, which while less than the record $640 million burned in Q4 (over $1 billion in the last 6 months) was $160 million than its cash burn from a year ago. The company still expects to burn a total of $2 billion for the full year.

How the company explains it:

Free cash flow in Q1’17 was -$423 million vs. -$261 million in the year ago quarter and an improvement from -$639 million in Q4’16. The growth in our original content means we continue to plan to have around $2B in negative FCF this year.

 

We have a large market opportunity ahead of us and we’re optimizing long-term FCF by growing our original content aggressively. Negative near-term FCF is the result of the big increases in our original content, combined with small but growing operating margins. Since we want our operating margins to grow slowly so we can spend enough to quickly grow revenue and original content, we anticipate negative FCF to accompany our rapid growth for many years. Our operating margins are our key indicator of improving global profitability; they are already growing and we plan to keep them growing for many years ahead. Eventually, at a much larger revenue base, original content and revenue growth will be slower, and we anticipate substantial positive FCF, like our media peers.

It remains to be seen if the transition from massive cash burn to cash flow positive is as simple as the company expects it to be.

Some disagree: Geetha Ranganathan, commenting on the company's cashflow said "Cash burn is still an issue - the company has $14.5 billion in streaming-content obligations, and expects to fork out over $6 billion this year, making it the biggest spender for non-sports programming."

One thing is clear: expect much more cash burn:

As our slate of content expands, we’ll spend over $1 billion in 2017 marketing our content to drive member acquisition. As part of this, we are investing more in programmatic advertising with the aim of improving our ability to do individualized marketing at scale and to deliver the right ad to the right person at the right time. Buttressing this activity is the substantial earned media coverage around the Netflix brand, technology and content we generate globally through events and activities aimed at journalists and social media influencers. We also market our content extensively to members through our service and with our partners. For instance, we participated in Comcast’s Watchathon in April, providing X1 subscribers unlimited access to Netflix for a week.

As for the competition...

Our investors often ask us about ecosystem change, such as the advent in the US of virtual MVPDs (like Sling, Playstation Vue, DirecTV Now, YouTube TV and Hulu’s forthcoming service). We believe VMVPDs will likely be more directly competitive to existing MVPD services since they offer a subset of the same channels at $30-$60 per month, and may appeal to a segment of the population that doesn’t subscribe to a pay TV bundle. But we don’t think it will have much of an impact on us as Netflix is largely complementary to pay TV packages. Our focus also is on on-demand, commercial free viewing rather than live, ad-supported programming.

 

Additionally, investors ask us about Amazon’s move into NFL football. That is not a strategy that we think is smart for us since we believe we can earn more viewing and satisfaction from spending that money on movies and TV shows.

Netflix also explained why it dropped its popular 5 star rating model with "thumbs up/thumbs down":

As always, our product team has dozens of tests running in the endless quest for even higher member satisfaction. One test that won conclusively last year and has now been rolled out to all members is our new “thumbs-up thumbs-down” feedback model, replacing the 5-star model we have had from our DVD days. The amount of usage we get with this new approach is over twice as many ratings. With this additional personal input, we’ll be able to improve personalization, making your front screen on Netflix even more relevant.

However, forget the potential growth slowdown, or the massive cash burn, or the competition, or pretty much anything else: .by far the scariest thing in the letter to shareholders was the following:

Just ahead of the release of our third film from Adam Sandler, Sandy Wexler , we announced the renewal of our deal with Sandler to premiere an additional four films exclusively on Netflix around the world. We continue to be excited by our Sandler relationship and our members continue to be thrilled with his films. Since the launch of The Ridiculous 6, Netflix members have spent more than half a billion hours enjoying the films of Adam Sandler.

For those wondering where America's once legendary productivity has gone, the answer is in the bolded sentence above.