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Netflix Announces €1 Billion Debt Offering

24 Apr, 2017 By: Erik Gruenwedel



After posting its first profitable quarter in foreign operations, Netflix April 24 announced a €1 billion ($1.08 billion) bond offering to international investors.

Netflix said it intends to use the money generated for general corporate purposes, which may include content acquisitions, capital expenditures, investments, working capital and potential acquisitions and strategic transactions.

Netflix generated $43 million contribution profit on $1 billion in revenue from international operations through March 31. It is projecting a $28 million contribution loss on revenue of $1.1 billion in the second quarter, ending June 30.

In a recent shareholder letter, CEO Reed Hastings and CFO David Wells revealed Netflix would spend $1 billion marketing original content this year. The SVOD pioneer is also spending upwards of $5 billion on content.

In the April 17 letter, Hastings and Wells foreshadow and defend any bond offering as a fiscally prudent means of paying for original content production.

“Our debt to total cap ratio, at under 10%, is quite conservative compared to most of our media peers at 30% to 70%, and conservative compared to efficient capital structure theory,” the executives wrote.


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