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A Preview Before Netflix Q1 Report Results Release

Expectations for the streaming giant’s Q1 performance remain high. By Ching Wai.

US - With positive results of a second straight quarter of accelerating revenue growth, expectations are high for the next quarter for Netflix as the wait for the streaming giant’s Q1 report results draws to a close on 18 April. (Note: as of time of writing, the results are yet to be released.)

Netflix stocks rose almost 11% at the end of January after reporting its second straight quarter of accelerating revenue growth. Previously, Netflix gained 13.12 million subscribers worldwide in Q4 of 2023, outdoing the consensus estimate of 8.69 million, and totalling at 260.28 million paid subscribers globally. This can largely be attributed to the crackdown on shared passwords that began in the middle of last year.

Licensed series took up less than 10% of aggregate engagement among the top 50 Netflix shows from Q3 2021 to Q1 2024, according to Morgan Stanley’s analysis. 47 out of the 50 top shows were Netflix originals. While licensed shows significantly contribute to net content assets, originals are what drive Netflix’s scaled engagement.

Netflix has also struck a more than US$5 billion 10-year deal with TKO Group Holdings (TKO) to carry the WWE’s flagship professional wrestling programme Raw from January 2025. Further details are to be expected as the streaming service expands its live sports offerings.

Expected revenue is set at US$9.26 billion according to consensus estimates collected by VisibleAlpha, a substantial increase from the US$8.16 billion recorded for Q1 2023. Adjusted net income is predicted to be US$2.07 billion, and adjusted diluted earnings per share is at a projected US$4.68.

While expectations remain high and hopeful, it may be difficult for Netflix to continue to exceed expectations, as investment firm Wedbush observed. Shares of the streaming giant fell 2.5% to US$607.15 on 15 April, although the stock gained nearly 30% year to date and over 82% over the past 12 months.

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