Netflix TRA Expanded Report

Netflix has emerged the pandemic a powerhouse in the entertainment industry. This mail-order DVD, turned streaming powerhouse, turned Oscar-nominated production company has reinvented itself and continually expanded during its 25 years of operations. In December of 2023 they reported annual revenue of $33.7 billion.

Entity Rating: 3.25
Outlook: Stable

The streaming market is estimated to be at least $90 billion, and it is no surprise competitors such as Prime, Max, Disney, Hulu, Apple and Paramount are all working quickly to improve their platforms and content to reach the largest audience.

Despite material competition, Netflix is well positioned to preserve its investment grade status in the near- to medium-term due to its more than 290 million paid subscribers, ongoing secular demand shifts toward streaming services, and its robust free cash flow generations, which strengthened during the pandemic to $6.9 billion in the 12-months ending December 31, 2023. It maintains a defensible position in the market and has adequate balance sheet flexibility despite its $14.5 billion in short- and long-term debt obligations.