- Revenue is forecast at $8.17 billion
- Added 7.6 million new subscribers in Q4
- Launched new lower-priced ad-supported plan in November
Streaming platform Netflix (NFLX:NASDAQ) could come under pressure next week when it reports first quarter 2023 results (18 Apr). With little in the way of blockbuster shows and movies to drive subscriber numbers, there are concerns that revenue and earnings could fall flat.
Not that investors will find out subscriber numbers, Netflix has decided to no longer reveal how many users it has, a decision made in October 2022 that has echoes of Apple (AAPL:NASDAQ) no longer saying how many iPhones it sells.
SUBCRIBER NUMBERS DITCHED
Axing this data point from presentations has its pros and cons, on the one hand removing exposure to the vagaries of seasonality and production release schedules, on the other, removing what has been the key way to measure progress for analysts and investors.
The fourth quarter of 2022 was a good example of why subscriber numbers are arguably not as meaningful as once believed. The streaming platform reported 7.66 million new subscribers in the three months to 31 December, smashing its own estimate of 4.5 million, and bringing the total to 223 million across 190-odd countries.
Hits like Addams Family spin-off Wednesday, (26,633 views) and Glass Onion: A Knives Out Mystery movie (16,051 views) and Luther: The Fallen Sun, were the reason, Netflix said.
Yet it still missed earnings by miles, delivering EPS (earnings per share) of $0.12 versus $0.59 expected, thanks to a $462 million non-cash foreign exchange loss.
LACK OF TOP TV SHOWS
For the January to March 2023 quarter, analysts have EPS of $2.88 on $8.17 billion revenue pencilled in. But anticipated hit shows like The Night Agent and Beef released too recently to make an impact, could make hitting those estimates difficult.
Time will tell, and investors will be hoping for further progress on both the paid-sharing service and the lower-priced ads-backed alternative.
These are two important levers for Netflix to pull if it is to continue to fight off stiffening competition from an increasingly crowded streaming space, where Disney (DIS:NYSE), YouTube, Tik Tok and others are battling for our attention.
This will be crucial to maintaining its recovery trajectory in 2023, with the share price having rallied 15% or so so far this year. Yet the stock remains a long way from $690 levels of late 2021.
