Netflix (NFLX) will share its fiscal fourth quarter earnings on Tuesday after the market closes. Analysts are optimistic about strong results. The company closed out the year with exciting events like two NFL games, a boxing match featuring Jake Paul and Mike Tyson, and the return of the popular series “Squid Game.”
However, Netflix’s stock has faced challenges in 2024, pulling back from record highs reached the previous year. This decline reflects broader economic uncertainties that have affected major tech companies.
According to Bloomberg’s consensus estimates, here’s what Wall Street is anticipating for the fourth quarter:
- Revenue: $10.11 billion (slightly below Netflix’s own guidance of $10.13 billion), compared to $8.83 billion in Q4 2023.
- Earnings per share: $4.18 (versus $4.23 guidance), up from $2.11 in the same quarter last year.
- Net subscriber additions: 9.18 million, compared to 13.12 million in Q4 2023.
Geetha Ranganathan, a senior analyst at Bloomberg Intelligence, mentioned the high expectations for this quarter, describing the content lineup as among the strongest ever. The inclusion of live sports has driven significant viewer numbers.
The boxing match between Jake Paul and Mike Tyson attracted over 108 million viewers, making it the most-streamed sporting event ever. For comparison, the 2024 Super Bowl attracted 124 million viewers.
Netflix’s NFL games averaged around 30 million viewers, marking its best Christmas Day game in the US. Ranganathan noted that the integration of sports content, including the recent debut of WWE Raw, is likely to boost subscriber growth considerably.
This earnings report will be the last to share net subscriber figures, as Netflix will stop reporting this metric starting this year.
Despite stock fluctuations, Netflix has shown resilience, with its ad-supported tier now boasting 70 million active users worldwide. The company’s stock is up nearly 80% from last year, with many analysts declaring it a leading contender in the streaming wars.
However, Netflix’s latest viewership report indicated that year-over-year engagement levels remained stable, hinting at challenges ahead for price increases and future growth. While Netflix hasn’t raised its prices recently, analysts believe a price hike is overdue and may occur soon.
Currently, their ad-supported plan remains one of the lowest-priced options at $6.99 per month. In January 2022, Netflix raised the price for its Standard plan from $13.99 to $15.49 and has increased its Premium tier price twice since then.
Analysts predict that Netflix might adjust its revenue growth outlook for 2025 downwards due to factors like currency fluctuations. The company aims for growth between 11% and 13%, a decrease from last year’s 15% growth.
Overall, the upcoming earnings report is crucial for Netflix as it navigates these changes and expectations while maintaining a competitive edge in the streaming landscape.
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Netflix, Jake Paul, Mike Tyson, Geetha Ranganathan, Ranganathan
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