The streaming giant Netflix recently published its financial results for the first quarter of 2024. The company reported revenues of $9.37 billion, thus surpassing analysts’ forecasts of $9.27 billion compared to $8.16 billion in the corresponding quarter last year.
In terms of earnings per share, the company reported $5.28 per share, surpassing the early expectation of $4.52 per share and a jump of 56% compared to the corresponding quarter last year. In the shadow of the reports, a share Netflix Down more than 3% in late trading.
The company provided a disappointing forecast for the second quarter in which the company expects revenues of 9.49 billion dollars, a growth of 1.2% compared to this quarter, the analysts expected revenues of 9.53 billion dollars in the second quarter. In the profit line, the company expects $4.68 per share, slightly above analysts’ expectations of $4.54.
One of the main parameters that Netflix reported on is the number of subscribers – a figure that investors follow in particular, in light of the fact that it reflects whether Netflix is able to cope with the tough competition in the shadow of its other problems. According to the previous reports, Netflix had 260.8 million users – and now it reports 269 million users, an increase of about 9 million users compared to an expectation of only 5 million.
In recent quarters, Netflix aimed to address the problem of password sharing among users and created a mechanism that detects whether the user is watching from a device outside the home ecosystem, and curbs its use. Those users have the option of making a separate account or logging in as a sub-account in the original account, which will cost less. That’s why investors look at the number of subscribers in the shadow of this central problem.
The stock has positive momentum
Since the last reports, Netflix’s stock has risen by about 30%, as it slowly manages to correct the large decline it had in recent years. Today, Netflix’s share price stands at $610, while at its peak, in October 2021, it was $690 per share, and at its lowest, in July 2022, it was around $180 per share.
Netflix has actually signaled to investors so far that it is taking the reins into its own hands, both in relation to the tough competition and in relation to the problem of password sharing. The company’s market value stands at $267.24 billion, about $50 billion more than the previous quarter.
Another significant announcement that investors are waiting to hear from Netflix is the collaboration with WWE that will arrive on the platform in 2025. What this decision means is that Netflix is pushing more into live sports content, which will attract even more users. This can make users become a captive audience that must return every week to the weekly show they want to see, which is an important anchor for Netflix in terms of the number of users.
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