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Netflix Starts 2024 with a Bang

ByJosh Gilbert
Published 19/04/2024, 01:49

Netflix (NASDAQ:NFLX) justified its rally this year, beating expectations across all key metrics as the business continues to grow at the fastest pace since the pandemic.

Netflix (NFLX) added 9.33 million new subscribers, delivering its best subscriber growth since 2020 and nearly doubling analyst estimates. Its crackdown on password sharing is undoubtedly bearing fruit, and its strong content slate is enticing users. Importantly, those new subscribers are well and truly aiding Netflix’s top and bottom line, with earnings growing by more than 80% in the quarter.

Its advertising tier has also been a resounding success, targeting the more cost-conscious consumer effectively. This model will continue to support growth moving forward, and it is now in a healthy financial position to add new top-quality content, such as live sports.

Netflix still has a huge target market and, therefore, a good growth runway if it continues to deliver. The downside to the report was that its Q2 revenue forecast came in slightly weaker than expected, signalling that subscriber growth might be lower next quarter. Netflix also said it would stop reporting quarterly subscriber numbers from next year, a move that will likely disappoint investors who see it as a key metric each quarter. This may tarnish what was a stellar report overall, especially with Wall Street expectations extremely high.

Netflix Quarterly Earnings Per Share

Josh Gilbert, Market Analyst at eToro

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