Netflix Earnings Preview: Strong Results Expected After Stellar Quarter
TL;DR:
* Netflix (NFLX) to report Q4 earnings on Tuesday after market close.
* Analysts forecast robust results driven by strong content slate and live sports events.
* Wall Street expects revenue of $10.11 billion, EPS of $4.18, and 9.18 million net subscriber additions.
* NFL games, Jake Paul vs. Mike Tyson boxing match, and "Squid Game" contributed to the success.
* Sports programming seen as a key growth driver, with WWE Raw debut expected to boost retention.
* Price hikes likely on the horizon as the company seeks to offset flat year-over-year engagement levels.
Analyst Expectations:
According to Bloomberg consensus estimates, analysts anticipate strong results for Netflix's fiscal fourth quarter:
* Revenue: $10.11 billion (Netflix guidance: $10.13 billion) vs. $8.83 billion in Q4 2023
* Earnings per share: $4.18 (Netflix guidance: $4.23) vs. $2.11 in Q4 2023
* Net subscriber additions: 9.18 million vs. 13.12 million in Q4 2023
Strong Content Slate and Live Sports Success:
Geetha Ranganathan, senior analyst at Bloomberg Intelligence, highlights Netflix's solid content offerings as a key driver for the quarter, calling it "one of their strongest quarters ever."
Live sports programming has also played a significant role, with the Jake Paul and Mike Tyson match attracting over 108 million global viewers, becoming the most-streamed sporting event of all time. NFL games averaged around 30 million viewers, contributing to Netflix's most-watched Christmas Day game ever in the US.
Sports as a Growth Engine:
Ranganathan emphasizes the importance of sports in shaping the future of Netflix, with the recent debut of WWE Raw expected to drive further growth and subscriber retention.
"We're expecting well over 10 million subscriber additions," Ranganathan adds.
Last Report with Subscriber Figures:
This will be the last earnings report in Netflix's history to disclose net subscriber figures. The company will stop reporting this metric at the start of the year.
Price Hikes Loom:
Ranganathan anticipates price increases as Netflix seeks to offset the recent slowdown in year-over-year engagement levels.
The company has yet to raise the price of its ad-supported offering, which remains one of the cheapest among major streaming platforms at $6.99 per month.
Valuation Concerns:
Analysts speculate that Netflix's 2025 revenue outlook may be revised downward due to the strengthening dollar.
"I think they'll temper those revenue growth projections," Ranganathan predicts. "But I think the way that they offset that is with a big price increase."