Categories Analysis, Leisure & Entertainment

Netflix (NFLX) set to report Q2 2022 earnings results tomorrow, here are a few points to note

Netflix expects revenue to grow 9.7% year-over-year to $8.05 billion

Shares of Netflix Inc. (NASDAQ: NFLX) were up over 1% on Monday. The stock has dropped 68% year-to-date. The streaming giant will report its second quarter 2022 earnings results on Tuesday, July 19. Here’s what to look out for in the report:

Revenue

For the second quarter of 2022, Netflix expects its revenue to grow 9.7% year-over-year to $8.05 billion. In the second quarter of 2021, revenue grew 19.4% YoY to $7.34 billion and in the first quarter of 2022, it rose 9.8% YoY to $7.86 billion. Analysts have projected $8.04 billion in revenue.

Although Netflix’s revenues have grown consistently, the rate of growth has slowed down and this has been a concern for some experts. In Q2 2021, revenues grew 19% but this was down to 9.8% last quarter. For Q2 2022 the growth rate is projected to be 9.7%.

Profitability

Netflix has guided for net income of $1.354 billion, or $3 per share, for Q2 2022. In Q2 2021, net income was $1.353 billion, or $2.97 per share, and in Q1 2022, net income was $1.59 billion, or $3.53 per share. Analysts are estimating EPS of $2.96.   

Netflix Q1 2022 Earnings Infographic

Subscribers

This is one key point that everyone will be looking out for when the Q2 results are announced. Last quarter, Netflix reported a loss of 200,000 subscribers, which was the first time it had ever lost subs. This was against net additions of 2.5 million subscribers that it had expected for that quarter. To make matters worse, the company has guided for a loss of 2 million subscribers for the second quarter.

This loss of subscribers amid heavy competition in the streaming space is a real cause of concern. It will be worth noting if the company gives any updates on how it plans to retain and increase subscribers going forward. For Q2, Netflix expects global streaming paid memberships to increase 5% to 219.64 million.

Partnership with Microsoft

Back in April, Netflix said it was planning to introduce a new lower priced ad-supported subscription plan for viewers. Last week the company announced that it has selected Microsoft (NASDAQ: MSFT) as its global advertising technology and sales partner to work on this ad-supported offering. Details on this partnership are another key point to watch out for when the company reports results.

Click here to access Netflix’s Q2 2022 earnings results

Looking for more insights on the earnings results? Click here to access the full transcripts of the latest earnings conference calls!

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