Netflix (NFLX) is set to report Q4 2024 earnings next week, a few points to note

Shares of Netflix, Inc. (NASDAQ: NFLX) stayed red on Monday. The stock has gained 69% over the past 12 months. The streaming giant is scheduled to report its earnings results for the fourth quarter of 2024 on Tuesday, January 21, after markets close. Here’s a look at what to expect from the earnings report:

Revenue

Netflix has guided for revenues of $10.13 billion for the fourth quarter of 2024, which represents a growth of nearly 15% from the year-ago period. Analysts’ targets match this number. In the third quarter of 2024, revenues grew 15% year-over-year to $9.8 billion.

Earnings

Netflix expects net income to be $1.85 billion, or $4.23 per share, in Q4 2024. Analysts are predicting earnings of $4.20 per share. This compares to net income of $938 million, or $2.11 per share, in Q4 2023. In Q3 2024, net income grew over 40% YoY to $2.36 billion, or $5.40 per share.  

Points to note

Netflix expects revenues to grow 17% on a FX-neutral basis in Q4 2024. The company expects operating income of $2.19 billion and operating margin of 21.6% for the fourth quarter. This is up from operating income of $1.5 billion and operating margin of 17% reported in the same quarter a year ago. In Q3 2024, operating income was $2.9 billion and operating margin was 29.6%.

Netflix expects paid net additions to be higher in the fourth quarter compared to the third quarter due to normal seasonality and a strong content slate. The company added 5.1 million new subscribers in Q3.

Netflix is expected to continue to benefit from its strong content slate in Q4, with shows like Squid Game 2 and Black Doves as well as movies like Carry-On and Spellbound. It also expanded its offerings to include live sporting events, which is expected to have helped drive engagement.

The company continues to make progress in its advertising business and its ads plan is gaining popularity. In Q3, its ads plan accounted for over 50% of sign-ups in its ads countries and membership on this plan grew 35% quarter-over-quarter. Improving its advertising offerings will be a priority for NFLX for the next couple of years.

Netflix forecasts revenue to grow 15% YoY for the full year of 2024. The company is projecting operating margin of 27% for the year, which represents a six percentage point increase compared to 2023.