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What to watch for when Netflix (NFLX) reports Q2 2024 financial results

Posted on by darion

Netflix, Inc. (NASDAQ: NFLX) shares remained green Tuesday. The stock is up 42% year to date. The streaming giant is set to report second-quarter 2024 results on Thursday, July 18, after markets close. Here’s what to expect from the earnings report:

Income

Netflix is ​​forecasting revenue of $9.49 billion for the second quarter of 2024, up 16% year over year. Analysts are forecasting the company’s revenue of $9.53 billion in the second quarter. In the first quarter of 2024, revenue increased 15% year over year to $9.37 billion.

Profits

Netflix is ​​forecasting net income of $2.06 billion, or $4.68 per share, for the second quarter of 2024. Analysts are forecasting earnings of $4.74 per share for the second quarter. That compares with net income of $1.48 billion, or $3.29 per share, reported in the second quarter of 2023. For the first quarter of 2024, the company reported net income of $2.3 billion, or $5.28 per share.

Points to note

For the second quarter of 2024, Netflix expects revenue to grow 21% on a currency-neutral basis. It expects net paid add-ons to be lower in the second quarter compared to the first due to typical seasonality. It also expects global average revenue per membership (ARM) to increase year-over-year on a currency-neutral basis in the second quarter.

Netflix added 9.3 million subscribers in Q1. Global paid memberships grew 16% YoY to 269.6 million. ARMs grew 1% YoY, or 4% on a currency-neutral basis. The company continued to benefit from strong engagement and a strong roster, and engagement remained healthy despite changes like paid sharing.

In advertising, Netflix continues to scale its membership base and expand its capabilities for advertisers. In Q1, its advertising membership grew 65% sequentially.

For the second quarter, Netflix is ​​expecting operating income of $2.52 billion and an operating margin of 26.6%, compared to operating income of $1.82 billion and an operating margin of 22.3% in the same period last year. In the first quarter, operating income was $2.63 billion and an operating margin of 28.1%.