As Netflix (NASDAQ: NFLX) prepares to report first-quarter 2024 earnings, analysts are predicting solid growth across key metrics. The streaming giant is expected to report impressive earnings per share (EPS) of $4.49, up 55.9% year over year.
This significant increase in EPS is expected to generate optimism among investors and analysts and indicate Netflix’s strong financial performance. Sales are also expected to reach approximately $9.26 billion, an increase of 13.4% from the previous year.
Analysts expect 4.88 million new subscribers in the first quarter
Although Netflix has not provided formal guidance on subscriber growth, analysts expect the company to add approximately 4.88 million new subscribers in the first quarter of 2024, which is higher than the previous year. That’s nearly three times as much. This growth is expected to be driven by the company’s recent strategic actions, including the introduction of ad tier plans and a crackdown on password sharing.
By region, sales are expected to increase 13.6% to $4.1 billion in the United States and Canada, while sales in Asia Pacific are expected to increase 12.6% to $1.05 billion. Growth is also expected in the Latin America, Europe, Middle East and Africa (EMEA) region, with revenue increasing by 5.5% and 18.3%, respectively.
Netflix’s Q4 2023 results confirm high expectations, focus on ad tier data
Last quarter (Q4 2023), Netflix achieved impressive results, increasing the number of users by 13.1 million and reaching a record high of 260.8 million subscribers. This growth was primarily driven by the success of the company’s new ad tier plan and proactive measures to curb password sharing.
The positive results of these strategic moves are expected to give investors and analysts confidence in Netflix’s ability to adapt and grow in a competitive market. Financial performance was also strong, with sales up 8.2% to $8.83 billion, net income soaring to $937.8 million, and EPS of $2.11.
As investors and analysts eagerly await Netflix’s Q1 2024 earnings report, several key metrics will be in focus. Revenue growth, particularly from advertising tier plans, will continue to impact the company’s overall results.
Additionally, Netflix has set a goal to improve its operating margin for the full year of 2024 from 21% in 2023 to 24%. Subscriber numbers will also be a key focus, as the company needs more formal forecasts. Investors will see how recent initiatives such as ad tier models and market expansion translate to user growth.
Additionally, updates on Netflix’s strategic moves, such as the recently announced WWE programming deal, will be of great interest to investors and analysts. The deal represents a significant expansion of Netflix’s content offering and could have a significant impact on subscriber engagement and financial metrics.
Do you think Netflix will beat expectations in Q1 2024? Let us know in the comments below.
Disclaimer: The author does not own or hold any securities discussed in the article.
About the author
Tim Freese is the co-founder of Tokenist. He has a bachelor’s degree. He earned his bachelor’s degree in mechanical engineering from the University of Michigan and his MBA from the University of Chicago Booth School of Business. Tim is a senior associate on the investment team in RW Baird’s US private equity practice and co-founder of Protective Technologies Capital, an investment firm specializing in sensing, protection and control solutions.
