Netflix Set to Report Strong Earnings Amid Sports Success and Ad Tier Growth
Key Points:
* Netflix (NFLX) is expected to report robust fourth-quarter earnings on Tuesday.
* Analysts predict revenue of $10.11 billion, EPS of $4.18, and net subscriber additions of 9.18 million.
* Strong sports programming, including the Jake Paul vs. Mike Tyson fight and NFL games, boosted viewership.
* Netflix is phasing out its lowest-priced ad-free plan and is expected to raise prices in the US market.
* Investors anticipate a downward revision to Netflix's 2025 revenue outlook due to macroeconomic uncertainties.
Earnings Expectations:
* Revenue: $10.11 billion (Netflix's guidance: $10.13 billion)
* Earnings per share: $4.18 (Netflix's guidance: $4.23)
* Net subscriber additions: 9.18 million
Content Slate and Sports Success:
* Netflix's content slate has been a key driver of its performance, with live sports programming generating significant viewership.
* The Jake Paul vs. Mike Tyson match became the most-streamed sporting event ever, attracting over 108 million global viewers.
* NFL games averaged around 30 million viewers, contributing to Netflix's most-watched Christmas Day game ever in the US.
Ad Tier Success:
* Netflix's ad tier has reached 70 million global monthly active users since its launch two years ago.
* The company has yet to raise the price of its ad-supported offering, making it one of the most affordable plans in the streaming market.
Price Hikes and Valuation Concerns:
* Netflix has raised prices several times in recent years, with its Standard plan currently costing $15.49 and its Premium tier priced at $22.99.
* Analysts expect further price increases in the US market.
* Valuation concerns have arisen due to macroeconomic uncertainties and a strengthening dollar, which may lead to a downward revision in Netflix's 2025 revenue outlook.