Netflix gains 1.5% ahead of today earnings release📊What are Wall Street expectations?

Netflix (NFLX.US) is the first, large US-tech company which will report earnings during this earnings season, after today's session on Wall Street. Investors and analysts are keenly anticipating the results, focusing on key financial metrics, subscriber growth, and strategic initiatives that could influence the company's trajectory in the streaming industry. The option market implies even 7.5% change in the share price after the report, as investors bet on almost doubling profits on a yearly basis. Netflix shares price is up almost 80% YoY.

Wall Street expectations

• Revenue: Analysts forecast Q4 revenue of approximately $10.1 billion, marking a 14.9% increase from $8.83 billion in the same quarter the previous year.

• Earnings Per Share (EPS): The consensus estimate for EPS is $4.20, indicating a significant 99.1% year-over-year growth from $2.11 in Q4 2023.

Netflix is expected to have concluded Q4 with approximately 290.9 million global subscribers, up more than 10% from 260.3 million a year earlier. The earnings report will be the last to include quarterly subscriber numbers, as the company shifts its focus toward financial performance metrics. Netflix aims to double its advertising revenue in 2025, contingent on the growth of ad-tier memberships. The Q4 earnings will show is that really possible scenario.

• The introduction of live sports, including NFL games and the "Tyson vs. Paul" boxing event, is anticipated to have attracted new subscribers and increased engagement.

• The release of "Squid Game" Season 2 and other original series likely contributed to subscriber growth and retention during the quarter.

• Netflix's ad-supported subscription tier continues to be a focal point for revenue diversification. The company aims to double its advertising revenue in 2025, contingent on the growth of ad-tier memberships.

• Additionally, potential price increases are anticipated, with analysts expecting these adjustments to be manageable without significantly impacting subscriber growth.

• Netflix’s global subscriber count is expected to show an increase, with forecasts ranging between 3–5 million net additions for the quarter. Regions like Asia-Pacific and Latin America are likely to drive growth vs the relative growth slowdown in North America and Europe.

Netflix (D1 interval)

Source: xStation5