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Netflix Set to Unveil Q1 2024 Earnings Amid Subscription Growth and Rumors of Price Increases

Bruno T
Analysis & Opinion
April 18 2024 8:27AM

Netflix (NASDAQ:NFLX) is poised to announce its financial results for the first quarter of 2024 after the US stock markets close on Thursday. Wall Street analysts are projecting a notable increase in revenues and earnings, with expectations set for the video-on-demand streaming giant to post earnings of $9.27 billion for the quarter, up from $8.2 billion in the same period last year. The earnings per share (EPS) are anticipated to rise significantly to $4.52, compared from $2.88 per share in the previous year.

Analysts at MoffettNathanson are optimistic about subscriber growth, predicting an addition of between 5 million and 7 million new subscriptions. This boost is expected to elevate the total number of Netflix subscribers to over 265 million globally. Such growth continues to underline Netflix’s dominance in the streaming sector.

Investors and analysts are also closely monitoring the potential impact of rumored subscription price increases on new memberships. Although Netflix’s Standard plan price has been stable since January 2022, there are strong indications of an impending price hike.

Adding to its revenue stream, Netflix’s advertising-driven tier has shown significant growth. Amy Reinhard, Netflix’s president of advertising, highlighted at the Variety Entertainment Summit in January that the ad-tier plan had attracted over 23 million monthly active users. This development hints at an expanding revenue base for the company.

Further attention is on Netflix’s strategy to curtail password sharing, a move that substantially boosted subscriber numbers in the latter half of 2023. Although the surge from this initiative is expected to stabilize, the platform continues to draw attention with recent hits like “Avatar: The Last Airbender,” “The Gentlemen,” and “Griselda,” along with movies such as “Damsel” and “Spaceman.”

The impact of Verizon Communications Inc.’s latest bundle offerings on Netflix’s performance is still under scrutiny. Verizon’s web portal, which includes Netflix-STARZ and Netflix Premium-AMC+ packages, could influence Netflix’s subscription dynamics and financial outcomes.

Shares of Netflix were up 0.62% in premarket trading, priced at $617.50 each. The company’s market capitalization currently stands at $265.58 billion, reflecting investor confidence ahead of the earnings release.