BUSINESSWEEK'S HOT GROWTH COMPANIES

Hot Growth Special Report 2006 >

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29

Netflix (NFLX)

If you want to kill this online DVD-rental service, you'd better drive a stake through its heart, Dracula-style. Netflix shares plunged 80% after video-store giant Blockbuster entered the online business in 2004. But Netflix roared back: 2005 sales rose 36%, profits doubled to $40 million, and shares have tripled since early last year. Now, stores are hurting: Blockbuster and Movie Gallery lost a combined $1 billion last year. Netflix is branching into film distribution, buying rights to 140 films in an effort to boost the market for smaller films its 5 million subscribers choose more often than new releases. And it's spending millions on R&D to prepare to deliver movies over the Internet. The goal: 20 million subscribers by 2010 to 2012, and 50% profit growth each of the next three years.

Company Info

2005 Rank

NR

Market Value*
($ Millions)

1,645.3

Sales*
($ Millions)

753.9

Sales Growth
(3-yr. avg. annual)

66.7 %

Profits*
($ Millions)

55.2

Profit Growth
(3-yr. avg. annual)

154.0 %

Return on Inv. Capital (3-yr.)

12.7 %

Share Price
12-Mo. Hi/Lo

33/11

Share Price
As of 4/28/06

30

Return on Equity

23.2 %

P/E Ratio

35

No. of Employees

985

Industry Internet Retail
CURRENT
MARKET INFO

NFLX >

COMPANY WEB SITE >
Location Los Gatos, Calif.
Phone 408 540-3700
*Trailing 12 months
Stock price data as of 4/28/06
DATA: Standard & Poor's Compustat

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Higher Forecast for Netflix


Company Snapshot

Netflix operates as an online movie rental subscription service provider in the U.S. It provides its subscribers access to a library of movie, TV, and other filmed entertainment titles. As of Dec. 31, 2005, the company provided approximately 4.2 million subscribers access to a library of approximately 55,000 movies, TV, and other filmed entertainment titles. Netflix was founded by Reed Hastings in 1997 and has its headquarters in Los Gatos, Calif.


Data provided by Capital IQ
 
Reed Hastings

Reed Hastings, 45

Chairman, Chief Executive Officer and President


Total Compensation*

$ 300,270

Total Options Value*

$ 36,452,238

* Fiscal Year 2005

DEGREES HELD
Bowdoin College - BA, Stanford University - MS


Executive Bio

Reed Hastings has been chief executive of Netflix, since September, 1998; president since July, 1999; and chairman of the board since inception. Hastings also served as president of the California State Board of Education. From June, 1998, to July, 1999, Hastings served as CEO of Technology Network, a political service organization for the technology industry. Hastings served as CEO of Pure Atria Software, a maker of software development tools, from its inception in October, 1991, until it was acquired by Rational Software, a software development company, in August, 1997. Hastings holds an MSCS degree from Stanford University and a BA from Bowdoin College.


Management Team

Key Executives

Reed Hastings; William Henderson; W. Barry McCarthy; Neil Hunt; Patty McCord; Leslie J. Kilgore; Theodore A. Sarandos

Board Directors

Jay C. Hoag; Michael N. Schuh; Timothy M. Haley; Reed Hastings; Gregory S. Stanger; A. George Battle


Executive Data provided by Capital IQ