NFLX is soaring after hours to fresh all time highs, not so much due to some blockbuster numbers, but because the company reported results that beat Wall Street's lowballed estimates once again. These were as follows:

Revenue of $1.175 billion

EPS of $0.79, or $48.4 million, beating expectations of $0.66

Domestic net adds were 2.33 million, Estimate 2.05 million, leaving a total of 33.4 million subs at the end of the quarter, and 31.7 million paid subs.

In terms of the company's business model, the things are as they were: NFLX is using the cash generated from its doomed, runoff legacy DVD rental business, which in Q4 generated $110MM of the total profit, or half of total, and is using that to fund its international expansion. So far, NFLX has 10.9 million total international streaming subs, which resulted in losses of $57.2 million. It remains unclear what the breakeven on this international growth strategy is in terms of subs, although NFLX has so far burned $663 million on foreign expansion in the past two years, offset by $991 million in profits at its domestic streaming operations. Does this justify a 300x P/E? For now the market's answer is a resounding yes, having sent the stock higher by $55 in the after hours, up 17%!

The company's forecast is below: the bottom line is that NFLX anticipates 1.6 million net adds in Q1 2014 higher than the 1.275 consensus, and expects EPS of $0.78 compared to the estimated $0.75.

However, EPS for this company, which has massive company content acquisition costs, are largely meaningless.

Additionally, since everyone is wondering just what pricing power NFLX has, here is how the company plans to once again reintroduce plan tiering - it bears remining what a horrible idea this was the last time around.

Last April we introduced a 4-concurrent stream $11.99 option to begin our evaluation of plan tiering. Since late last year, we have also been testing 1-stream and 3-stream variants, as well as SD/HD variations, at various price points. Eventually, we hope to be able to offer new members a selection of three simple options to fit everyone’s taste. If we do make pricing changes for new members, existing members would get generous grandfathering of their existing plans and prices, so there would be no material near-term revenue increase from moving to this potential broader set of options. We are in no rush to implement such new member plans and are still researching the best way to proceed. ... In Ireland, on January 10th, we increased our monthly subscription price for new members by one Euro from €6.99 to €7.99, bringing Ireland pricing in line with our other Euro-zone countries. Existing members in Ireland received two-year grandfathering of their existing €6.99 pricing. Because of this grandfathering, there will be no material revenue impact from this change in 2014. It’s too early to tell if this change will materially affect our growth in Ireland.

Netflix also admitted the competition is growing fast:

We think YouTube, Amazon Instant Video, iTunes video and BBC iPlayer are also growing fast. In the traditional MVPD sector, there is lots of activity that may affect us on the margin. Verizon is buying the Intel Internet MVPD system and recently bought a CDN (EdgeCast) and streaming software firm (UpLynk). These are big investments, so they clearly have big plans. Sony announced they are launching an Internet MVPD system this year. Finally, depending on the decision of the Supreme Court, Aereo will either have to pay for the broadcast content like MVPDs, or the MVPDs will no longer be obliged to pay. Within the MVPD ecosystem, there are potentially big shake ups. In contrast, we continue licensing and producing more exclusive content for our direct-to-consumer business, and are relatively unaffected by the big bundle questions.

As for the one biggest item that everyone is, or should be, concerned about, the recent passage of Net Neutrality, NFLX was surprisingly non-challant, and its only argument against the potential collapse in profits once ISP start putting up gates, is that there is "broad public support" for cheap content, and "ISPs will "avoid this consumer-unfriendly path of discrimination." Good luck with that - the reality is that ISPs can't wait to start charging NFLX now that they have a legal backstop.

On Net Neutrality: Unfortunately, Verizon successfully challenged the U.S. net neutrality rules. In principle, a domestic ISP now can legally impede the video streams that members request from Netflix, degrading the experience we jointly provide. The motivation could be to get Netflix to pay fees to stop this degradation. Were this draconian scenario to unfold with some ISP, we would vigorously protest and encourage our members to demand the open Internet they are paying their ISP to deliver. The most likely case, however, is that ISPs will avoid this consumer-unfriendly path of discrimination. ISPs are generally aware of the broad public support for net neutrality and don’t want to galvanize government action. Moreover, ISPs have very profitable broadband businesses they want to expand. Consumers purchase higher bandwidth packages mostly for one reason: high-quality streaming video. ISPs appear to recognize this and many of them are working closely with us and other streaming video services to enable the ISPs subscribers to more consistently get the high-quality streaming video consumers desire. In the long-term, we think Netflix and consumers are best served by strong network neutrality across all networks, including wireless. To the degree that ISPs adhere to a meaningful voluntary code of conduct, less regulation is warranted. To the degree that some aggressive ISPs start impeding specific data flows, more regulation would clearly be needed.

Finally, curious how much cash a company that tomorrow will likely have a $23 bilion market cap, generates, here is the answer: $5.2 million in the quarter, and 16.3 million for all of 2013.... negative, that is.