Netflix is set to release its Q4 results today, with a conference call to follow.
The consensus estimate is for EPS of $0.51, a 62% decrease from the previous year, and revenue of $7.86 billion, a 2% increase.
The company previously guided for EPS of $0.36 and revenue of $7.8 billion, which were both lower than the consensus.
Investors will likely pay close attention to global streaming paid net adds, as Netflix does not typically provide detailed financial information. In the last quarter, paid net adds of 2.41 million exceeded the company's forecast of 1.00 million, leading to a rise in shares. For Q4, Netflix expects paid net adds of 4.50 million, compared to the 8.28 million in the same period the previous year.
Netflix also launched its ad-supported tier in some countries during the quarter. However, according to the Wall Street Journal, this service was not popular in November, raising concerns since the company reportedly made guarantees to advertisers regarding viewership.
Margins and the company's video game strategy will also be areas of focus. Netflix aims to expand margins and is in the early stages of entering the video game market, with a ten-year timeline. Additionally, investors will be looking for updates on account sharing and price increases, which are expected to roll out in early 2023.
TECHS:
The stock has been trading sideways over the past month and may dip back to its 50-day moving average if earnings do not meet expectations. However, if paid net adds continue to exceed forecasts, the stock may break above its recent resistance and challenge the upper end resistance it has faced of late.
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