Here’s the latest earnings summarized for you. If you like it, please share it with your friends.
- Q4’22 revenue, operating profit, and membership growth exceeded forecast, leading the industry in streaming engagement, revenue, and profit. [Positive]
- Q4 content slate outperformed expectations, including popular series and films [Positive]
- Successfully launched a new, lower-priced ad-supported plan in November and pleased with the early results [Positive]
- Delivered on the high-end of operating profit margin target for full year 2022 and expect to increase operating margin in 2023 compared to 2022. [Positive]
- In 2022, the company generated $32B of revenue, $5.6B in operating income, $2.0B of net cash from operating activities, and $1.6B of free cash flow (FCF), and expects at least $3B of FCF in 2023, assuming no material swings in foreign exchange (F/X) [Positive]
- Ted Sarandos and Greg Peters are now co-CEOs of Netflix, with Reed Hastings as Executive Chairman, completing the company’s succession process [Neutral]
- Bela Bajaria, formerly Head of Global TV, has become Chief Content Officer and Scott Stuber has become Chairman of Netflix Film [Neutral]
- Year over year revenue growth of 2% in Q4 (10% on a foreign exchange (F/X) neutral basis) was driven by a 4% increase in average paid memberships. Average Revenue per Member (ARM) declined 2% year over year, but grew 5% on a F/X neutral basis [Neutral]
- The company has a clear path to reaccelerate revenue growth by continuing to improve all aspects of Netflix, launching paid sharing, and building its ads offering. [Positive]
- The company’s north stars remain pleasing members and building greater profitability over time. [Positive]
Overall, the company has exceeded forecast in Q4’22 in terms of revenue, operating profit, and membership growth, which is a positive sign for the company’s future. The company’s successful launch of a new, lower-priced ad-supported plan, and the high-end delivery of operating profit margin target for full year 2022 also indicate positive growth. Additionally, the company’s expectation of at least $3B of free cash flow in 2023, and the completion of the succession process with Ted Sarandos and Greg Peters as co-CEOs, also bodes well for the future. This could have a positive impact on the stock price. However, the effect of the leadership change on the stock price is uncertain.
Link to the full earnings: https://s22.q4cdn.com/959853165/files/doc_financials/2022/q4/FINAL-Q4-22-Shareholder-Letter.pdf
Link on community: https://www.skool.com/invest-retire-community-1699/netflix-nflx-top-10-insights-for-q4-2022-earnings
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