To The Moon

On Thursday, January 19, streaming media giant $Netflix(NFLX)$ released its financial report for the fourth quarter of 2022.

In the fourth quarter of last year, Netflix's revenue was 7.85 billion US dollars, which was basically the same as market expectations. The number of paid users increased by 7.66 million, far exceeding the company's expected increase of 4.5 million, and the stock rose by 8% after the market. The market previously expected revenue to increase by 1.7% to $7.84 billion year-on-year, which is the lowest growth rate in 20 years since Netflix's IPO listing in 2002. It is expected that EPS will make a profit of 36 to 58 cents per share, with a net new subscriber of 4.6 million users.

Thanks to the strong third quarterly report and the market's expectation of advertising subscription packages to drive revenue and user growth, Netflix's stock price rose by more than 9% at the beginning of the 2023 New Year, outperforming the Nasdaq Index in the same period by more than 4%. Naifei has risen by 60% in the past six months, and has rebounded by more than 33% since the day before the last financial report was released, while the Nas Index has only increased by more than 1% since October 18 last year.

The guidelines issued by the company said that the global net number of new users in the fourth quarter was 4.5 million, almost the increment of 8.3 million yuan compared with the same period last year, which is also the lowest in the end-of-year holiday quarter since 2014. However, this increment nearly doubled from the 2.4 million in the previous quarter, raising the global total number of subscribers to 226 million, reversing the downward trend of users in the first half of 2022 for two consecutive quarters of 2022.

Netflix will not provide user growth guidelines for the next quarter in its financial report from 2023, on the grounds that after the introduction of subscription packages with advertisements and measures to combat paid account sharing in November last year and the beginning of this year, respectively, "rewards" has increasingly become a key performance indicator of the company's healthy growth. At the same time, the market expects that the net number of new users will be 2.6 million in the first quarter of this year, that is, the speeding growth of users in previous years will no longer be increased.

When the third quarterly report was released in October last year, the company warned that the strengthening of the U.S. dollar might reduce revenue by about $1 billion in the fourth quarter. With the easing of the U.S. dollar rise at the end of last year, analysts generally expected that the actual impact would be smaller, or the current revenue growth would exceed expectations.

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