Netflix Plans $27 Billion Stock Buyback, Representing 8% of Its Total Value

Key Points

• During Q2 2023, Netflix repurchased a record $4.7 billion of its stock, leaving $27.1 billion in buyback authorizations.

• A $2.8 billion termination fee from its failed acquisition of Warner Bros. contributed to financing this buyback.

• Netflix’s fully diluted share count declined by about 2% over the past year, supporting an increase in earnings per share.

Netflix (NASDAQ:NFLX) achieved a record stock buyback of $4.7 billion in the second quarter of 2023, concluding the period with $27.1 billion available for further repurchases. With current share prices around $76, the unused authorization could potentially retire about 8% of the company’s total shares. This aggressive buyback strategy was partly funded by a $2.8 billion termination fee from a failed Warner Bros. acquisition.

Netflix’s average fully diluted share count fell to approximately 4.26 billion shares, down from 4.35 billion the previous year, contributing positively to per-share earnings growth. While Netflix’s free cash flow for Q2 dropped to $1.5 billion from $2.3 billion year-over-year, management projects approximately $12.5 billion in free cash flow for the entire year—about two years of cash required to utilize the current buyback authorization.