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NETFLIX $NFLX JUST REPORTED EARNINGS
EPS of $5.40 beating expectations of $5.12
Revenue of $9.83B beating expectations of $9.77B
Netflix added 5.07M subscribers last quarter above expectations of 4M
Netflix $NFLX now has 282.7 Million paying subscribers up from 167.1M in 2019
Here's Netflix's updated Subscribers by Region
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Netflix (NFLX) Q2 2024 Earnings Analysis
Earnings Data:
Netflix reported earnings per share (EPS) of $5.40, beating expectations of $5.12.
The revenue for the quarter was $9.83 billion, surpassing expectations of $9.77 billion.
Netflix added 5.07 million subscribers in the last quarter, exceeding expectations of 4 million.
Earnings Call Summary:
Bullish Points:
Strong performance across the board with good momentum in business, revenue growth, member growth, and profit growth.
Healthy retention and stronger-than-expected acquisition driving outsized paid net ads.
India showing significant growth, becoming the No. 2 and No. 3 country in terms of paid net ads and percentage revenue growth.
Targeting a full-year operating income margin of 26%, up from prior guidance of 25%.
Expecting approximately $6 billion of free cash flow for the year.
Bearish Points:
Foreign exchange and other business considerations could cause annual margin expansion to vary each year.
Advertising is not expected to be a primary driver of revenue growth in 2024 or 2025.
Advertisers' primary negative feedback is the lack of immediate availability of desired ad tech features.
Competition with YouTube in certain segments for time and attention.
The impact of AI on creative processes is still uncertain and hard to predict.
The new homepage update's exact benefits are hard to quantify at this moment.
The gaming initiative, while showing growth, still has a small impact on the overall business and requires disciplined investment.
Relevant Article:
Netflix's revenue and operating margins continued to improve in the third quarter as subscriber growth slowed, showing the company's success in prioritizing profitability over growth. The company added 5.07 million subscribers in the third quarter, compared to 8.76 million in the same period last year.
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Earnings Analysis:Based on the earnings data, Netflix reported strong financial performance in the second quarter of 2024, exceeding both EPS and revenue expectations. The company also achieved higher subscriber growth than anticipated. The earnings call highlighted positive factors such as strong overall performance, healthy retention and acquisitions, and significant growth in India. However, there are bearish points to consider, including foreign exchange impact, the limited role of advertising revenue, and competition in certain segments.
Disclaimer: The above conclusion is for reference only and cannot be considered as investment advice.
Source: Netflix (NFLX) Q2 2024 Earnings Call Transcript
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