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January 19 , 2021 Fellow shareholders , 2020 was an incredibly difficult year with extraordinary loss for so many families , new restrictions that none of us have ever had to live with before and great uncertainty . We're enormously grateful that in these uniquely challenging times we've been able to provide our members around the world with a source of escape , connection and joy while continuing to build our business . With 8.5m paid net additions in Q4 , we crossed the 200m paid memberships mark . For the full year , we added a record 37m paid memberships , achieved $ 25 billion in annual revenue ( + 24 % year over year ) and grew operating profit 76 % to $ 4.6 billion . Our summary results and forecast are below . Q1'21 Q4'19 Q1'20 Q2'20 Q3'20 Q4'20 ( in millions except per share data ) Forecast Revenue Y / Y % Growth $ 5,467 $ 5,768 $ 30.6 % 27.6 % 6,148 $ 24.9 % 6,436 $ 22.7 % 6,644 $ 7,129 21.5 % 23.6 % Operating Income $ 459 $ 958 $ 1,358 $ 1,315 $ 954 $ 1,780 Operating Margin 8.4 % 16.6 % 22.1 % 20.4 % 14.4 % 25.0 % Net Income $ 587 $ 709 $ 720 $ 790 $ 542 $ 1,355 Diluted EPS $ 1.30 $ 1.57 $ 1.59 $ 1.74 $ 1.19 $ 2.97 Global Streaming Paid Memberships 167.09 182.86 192.95 195.15 203.66 209.66 Y / Y % Growth 20.0 % 22.8 % 27.3 % 23.3 % 21.9 % 14.7 % Global Streaming Paid Net Additions 8.76 15.77 10.09 2.20 8.51 6.00 Net cash provided by ( used in ) operating activities $ Free Cash Flow * ( 1,462 ) $ 260 $ 1,041 $ 1,264 $ ( 138 ) $ ( 1,670 ) $ Shares ( FD ) 451.4 162 $ 452.5 899 $ 1,145 $ ( 284 ) 453.9 455.1 455.3 Note : Figures are consolidated , including DVD . * Free cash flow represents Net Cash provided by ( used in ) operating activities less purchases of property and equipment and change in other assets . Q4 Results and Q1 Forecast Average paid streaming memberships increased 23 % year over year in Q4 , while average revenue per membership¹ was flat year over year both on a reported and foreign exchange ( F / X ) neutral basis . Revenue was 1 % higher than our guidance forecast , as paid net adds exceeded our 6.0m projection by 2.5m . Operating margin of 14.4 % ( a 600bps increase from Q4'19 ) also came in above our guidance , due to higher - than - expected revenue . EPS of $ 1.19 vs. $ 1.30 a year ago included a $ 258m non - cash unrealized loss from F / X remeasurement on our Euro denominated debt . For the full year , our 37m paid net additions represented a 31 % increase from 2019's 28m paid net adds . We're becoming an increasingly global service with 83 % of our paid net adds in 2020 coming from Average revenue per membership ( ARM ) is defined as streaming revenue divided by the average number of streaming paid memberships divided by the number of months in the period ; it was previously referred to as streaming ARPU . These figures do not include sales taxes or VAT . NETFLIX 1