Netflix beats by $0.77, beats on revs, net adds above street ests; guides Q2 EPS above consensus, revs below consensus; guides FY24 revs in-line (611.15 -2.54)
- Reports Q1 (Mar) earnings of $5.28 per share, $0.77 better than the FactSet Consensus of $4.51; revenues rose 14.8% year/year to $9.37 bln vs the $9.28 bln FactSet Consensus.
- Global streaming paid net adds in 1Q24 were +9.33 mln vs prior guidance of "up yr/yr from 1Q23's +1.75 mln.
- Q1 operating margin came in at 28.1% vs 26.2% prior guidance. Margin was above forecast primarily due to higher than anticipated revenue and the timing of content spend.
- Co issues mixed guidance for Q2, sees EPS of $4.68 vs. $4.54 FactSet Consensus; sees Q2 revs of $9.491 bln vs. $9.53 bln FactSet Consensus. Co guides to Q2 operating margin of 26.6%.
- Global streaming paid net adds outlook for Q2: Co expects paid net adds to be lower in Q2 vs. Q1 due to typical seasonality. Co forecasts global ARM to be up year-over-year on a F/X neutral basis in Q2.
- Co issues in-line guidance for FY24, sees FY24 revenue growth of +13-15%, which we compute as $38.11-38.78 bln vs. $38.68 bln FactSet Consensus. Co is raising its FY24 operating margin forecast to 25%, based on F/X rates, vs 24% prior guidance.
- Advertising: As noted before, co says its two priorities in ads are to scale its member base and to build out capabilities for advertisers. Co made progress on both fronts in Q1. Its ads membership grew 65% quarter on quarter (after rising nearly 70% sequentially in each of Q3'23 and Q4'23) with over 40% of all signups in its ads markets coming from its ads plan.