Earnings Alerts

Netflix Inc (NFLX) Earnings Exceed Expectations with Record 4Q Streaming Growth

By January 22, 2025 No Comments
  • Strong Streaming Growth: Netflix reported a streaming paid net change of +18.91 million for Q4, surpassing the estimate of +9.18 million, marking a 44% year-on-year increase.
  • Regional Performance:
    • UCAN region added +4.82 million memberships, a 72% increase year-on-year, beating the estimate of +1.75 million.
    • EMEA region reported +5 million, a slight 1% decline year-on-year, but still above the estimate of +3.09 million.
    • LATAM region showed strong growth with +4.15 million, a 77% increase year-on-year, well above the +1.50 million estimate.
    • APAC region added +4.94 million, a 70% increase year-on-year, surpassing the estimate of +2.70 million.
  • Overall Memberships and Financials: Total streaming paid memberships reached 301.63 million, up 16% year-on-year, beating the estimate of 290.93 million.
  • Revenue and Earnings: Q4 revenue stood at $10.25 billion, up 16% year-on-year, slightly above the estimate of $10.11 billion. EPS was $4.27, up from last year’s $2.11 and higher than the estimate of $4.18.
  • Operating Results: Operating income reached $2.27 billion for Q4, a 52% increase year-on-year, exceeding the $2.2 billion estimate, with an operating margin of 22.2%, surpassing the estimate of 21.9%.
  • Free Cash Flow: Free cash flow was reported at $1.38 billion, a 13% decrease year-on-year, but above the estimate of $1.06 billion.
  • First Quarter Forecast:
    • Anticipated revenue of $10.42 billion, slightly below the $10.48 billion estimate.
    • Forecast EPS of $5.58, under the $6.01 estimate.
    • Projected operating income of $2.94 billion, below the $3.13 billion estimate.
    • Expected operating margin of 28.2%, under the 29.8% estimate.
  • Yearly Forecast:
    • Estimated revenue range of $43.5 billion to $44.5 billion, slightly higher than the $43 billion to $44 billion previously projected, in line with the $43.59 billion estimate.
    • Revenue growth seen at +12% to +14%, compared to an estimate of +12.2%.
    • Expected operating margin of 29%, marginally above last year’s estimate of 28.4%.
    • Free cash flow expected at about $8 billion, slightly below the $8.51 billion estimate.

Netflix Inc on Smartkarma

Analyst coverage of Netflix Inc on Smartkarma reveals a bullish sentiment from top independent analysts like Baptista Research and Behind the Money. Baptista Research‘s analysis delves into Netflix’s strategic move into live entertainment, showcasing the streaming giant’s ambitious expansion plans. Additionally, Netflix’s strong financial performance, exceeding earnings expectations and adding new subscribers, underpins its growth trajectory as highlighted in another Baptista Research report.

Behind the Money‘s report emphasizes Netflix’s disruptive impact on Hollywood, reaching an all-time high in the stock market amid challenges like subscriber losses and competition. The dynamic analysis across these reports showcases the complexities of Netflix’s position in the competitive streaming market as it navigates strategic shifts for continued global dominance and industry innovation.


A look at Netflix Inc Smart Scores

FactorScoreMagnitude
Value2
Dividend1
Growth4
Resilience3
Momentum5
OVERALL SMART SCORE3.0

Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma

Based on the Smartkarma Smart Scores, the long-term outlook for Netflix Inc looks promising. With a strong Growth score of 4, the company is positioned well for expansion and future development in the Internet subscription service sector. Additionally, Netflix Inc shows impressive Momentum with a score of 5, indicating strong market performance and investor interest.

While the Value score is moderate at 2, and the Dividend score is low at 1, suggesting limited returns in terms of dividends, the company demonstrates Resilience with a score of 3. This resilience factor implies that Netflix Inc has the ability to weather economic uncertainties and operational challenges effectively. Therefore, overall, the outlook for Netflix Inc appears positive, especially in terms of growth potential and market momentum.


Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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