I don’t hold Netflix but it’s an important one to track.
It’s one of the early tech companies in the earning’s season and always gives us a good read on how the consumer is doing. It doesn’t get more discretionary than a Netflix subscription.
My main takeaways are, the business is strong. There was some lumpy cash flow but nothing too concerning. They put up good numbers for the quarter but slipped a little on guidance. Interestingly they did lift their guidance, just not as high as the market wanted. Q3 guide was short around 0.8% and annual was short about 0.5%. So nothing world ending.
The market likes to use the subscription count as a gauge for how well the company is doing and they have continued to grow the userbase again. Obviously growth here will have a cap, so they are trying to shift the markets eyes to other metrics, which is why they will stop reporting that number early next year. They have already warned us this change is coming well in advance too.
Big picture? Consumer doesn’t look too weak right now. Maybe they sense this coming, but the guide shortfall is minimal and suggests some caution.
$NFLX | Netflix Q2’24 Earnings Highlights:
🔹 EPS: $4.88 (Est. $4.74) 🟢
🔹 Revenue: $9.56B (Est. $9.53B) 🟢
🔹 Streaming Paid Net Change: +8.05M (Est. +4.87M) 🟢
Q3 Outlook:
🔹 EPS: $5.10 (Est. $4.74) 🟢
🔹 Revenue: $9.73B (Est. $9.82B) 😐
Raises FY’24 Outlook:
🔸 Revenue Growth: 14%-15% (Prev. 13%-15%); (Est. 14.9%) 😑
🔸 Operating Margin to 26% (Prev. 25%)
Regional Breakdown:
🔸 UCAN Streaming Paid Net Change: +1.45M (Est. +1.19M)
🔸 APAC Streaming Paid Net Change: +2.83M (Est. +1.25M)
Additional Insights:
🔸 Operating Margin: 27.2% vs. 22.3% YoY
🔸 Free Cash Flow: $1.2B
🔸 Global Streaming Paid Memberships: 277.65M (up 16.5% YoY)
Strategic Updates:
🔸 Ending quarterly membership reporting starting Q1’25.
🔸 Significant progress in ads business with 34% QoQ growth in ads tier membership.
🔸 Testing a new, more intuitive TV homepage design to improve the discovery experience.
🔸 New product approvals and expansions in content offerings, including live events and games, expected to drive future growth.
Source: Click here
