Netflix (NASDAQ:NFLX) is gearing up to unveil its first-quarter 2024 results on April 18th, with anticipation running high regarding its performance.
The streaming giant anticipates reporting earnings of $4.49 per share for the first quarter, reflecting a robust 55.9% year-over-year increase, or 12% on a foreign-exchange neutral basis. Analysts’ consensus estimate aligns with this projection, remaining unchanged at $4.49 per share over the past 30 days.
In terms of revenue, Netflix foresees a 13.2% year-over-year uptick to $9.24 billion. The consensus estimate for first-quarter revenues stands at $9.26 billion, indicating a 13.43% growth compared to the previous year.
Netflix has a track record of beating the Zacks Consensus Estimate in three out of the last four quarters, with an average negative surprise of 5.43%.
Key Considerations
For the first quarter of 2024, Netflix expects a sequential decline in paid net subscriber additions, attributed to seasonality and possible pull-forward effects from the strong fourth-quarter 2023 results. However, year-over-year growth is anticipated at 1.8 million subscribers.
Global average revenue per member (ARM) is expected to rise year over year on a foreign-exchange neutral basis.
The introduction of ad-supported low-priced plans is anticipated to contribute positively to revenue growth. Netflix’s ad-based plan has garnered over 23 million global monthly active users, highlighting its increasing popularity.
The company’s foray into gaming, particularly with the addition of the Grand Theft Auto trilogy, is expected to boost user engagement and subscriber numbers.
Despite these positive indicators, Netflix faces stiff competition from rivals such as Disney+, HBO Max, Peacock, Paramount+, Apple TV+, and Amazon Prime, as well as from traditional media and entertainment platforms.
Market Performance and Growth Estimates
In the year-to-date period, Netflix shares have surged by 27.9%, outperforming the Zacks Consumer Discretionary sector but trailing behind Disney’s returns. Apple, on the other hand, has experienced a decline in share value.
Analysts anticipate strong growth in Netflix’s paid total streaming net membership additions, with the consensus estimate pegged at 5.25 million.
Regional revenue estimates reflect robust growth projections across Asia-Pacific, Latin America, EMEA, and the United States and Canada.
Looking ahead, investors will also keep an eye on upcoming earnings announcements from industry peers such as Disney and Apple, set for May 7th and May 2nd, respectively.
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