The US stock market earnings season is underway. Netflix, one the world’s leading entertainment services with 231 million paid memberships in over 190 countries, is posting its first quarter 2023 financial results and business outlook on Tuesday, April 18 at around 1:00 p.m. Pacific Time.
The current price of Netflix’s Nasdaq-listed stock, NFLX, is about $333 and the company has a market capitalization of nearly $150 billion. NFLX is trading at almost similar levels as last year but YTD the share is up nearly 13%.
Analysts will be watching Netflix’s update on content spending and its efforts to crack down on password sharing as it prepares to publish earnings per share of $2.86 on revenue of $8.17 billion. The company has been reevaluating its streaming goals and shifting its attention to profitability after experiencing years of explosive growth. Netflix and Walt Disney Co. DIS have both laid off employees this year in an effort to cut costs.
The number of subscribers will also be a key topic. Subscriptions are expected to be significantly lower than the norm, according to FactSet analysts polled.
Netflix, which had 230.75 million global customers as of 2022, initiated ‘paid sharing’ plans in Canada, New Zealand, Spain, and Portugal in early February, following trials in Latin America last year.
All eyes will be on management commentary as to what kind of expansion and viewership Netflix expects in future. A clue that Netflix’s years of rapid growth are definitely slowing down is the company’s decision to stop offering guidance on subscriber additions.
In Q4 2022, Netflix added 7.66 million paid subscribers, more than what Wall Street expected.
For 2022, Netflix finished with 231 M paid memberships and generated $32 B of revenue, $5.6B in operating income, $2.0B of net cash from operating activities and $1.6B of free cash flow (FCF). In 2023, Netflix expects at least $3B of FCF, assuming no material swings in forex.