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Netflix has published its financial results. And positively surprised

Netflix has published its financial results. And positively surprised

created Forex ClubJanuary 20 2023

Netflix subscriber count rebounded from a loss of 200 in early 000, growing by 2022 million new subscribers in the fourth quarter.

In the current climate, content is key and Netflix has delivered a strong lineup of movies and shows that have retained customers and attracted new ones. Investors will be hoping the streaming giant can continue to deliver a stream of new titles throughout 2023, instead of single blockbusters from time to time.

But remember, there's still a lot of work for Netflix to do. 2022 was its slowest period in terms of subscriber growth since 2011, even despite a strong end of the year. Earnings and revenue fell short of expectations. Revenue was $7,85bn versus expectations of $7,86bn, and profit was 0,12c versus expected 0,42c.

Its long-term goals remained unchanged: maintain double-digit revenue growth (failed in 2022), expand operating margin and continue to grow positive free cash flow.

Some volatility for stocks may be due to the announcement that Netflix co-founder Reed Hastings will step down as Co-CEO after more than 20 years at the helm. While this is unlikely to bring about any dramatic changes, the change in C-suite's leadership could bring some uncertainty for shareholders.

CHECK: How to buy Netflix shares? Everything about the company [Guide]

Why is content king on Netflix?

The year 2022 was very uneven for Netflix - the streaming giant enjoyed a strong end of the year, gaining as much as 60 percent. in the last six months after a rather disastrous start. It lost around 1,2 million subscribers in the first half of the year, and the US and Europe struggled with rising maintenance costs. The company's valuation dropped significantly, trading at 15x P/E, down from the 40x it started the year at, which investors used as a buying opportunity and were rewarded as a result.

In QXNUMX, Netflix released content such as Stranger Things, dahmer i The Gray Man - the best Netflix movie in 2022. Thanks to this, the number of subscribers increased by 2,41 million after two quarters of decline, and revenues jumped by 6%. to $7,93 billion. Shares climbed as much as 11 percent. after the results, showing that content still reigns supreme.

Unlike Disney or Amazon, Netflix's content calendar is critical here, given that they have no other sources of revenue. However, content comes at a price. After a record-setting 2020, 2022 looks set to be the only positive year for Netflix in a decade. Free cash flow. Essentially, you can't keep Netflix movies anything other than success.

But it looks like Netflix is ​​finally starting to take off, and a solid mix of content could push new subscribers to over 4,5 million in the quarter - the most in two years.

What consumers can expect in 2023

A hit show or movie can be a huge success for a streaming service like Netflix. Take Squid Games, which saw record results but also helped support Netflix's growth in Asia-Pacific, its most successful region in 2021 and 2022.

So what can consumers expect in 2023? Immediately after the premiere, a new Netflix movie "Glass Onion" was viewed for 253,7 million hours in its first 17 days of release, placing it among the top five movies on the site's all-time rankings.

Netflix has many more offers for its subscribers: 

  • Extraction 2: The blockbuster Extraction starring Chris Hemsworth returns for another film. The first video was hugely successful in 2020, with 99 million views in its first four weeks of release.
  • Chicken Run: Dawn of the Nugget: Yes, that's right, Chicken Run is set to return to our screens in 2023. The sequel, set for 2023, will attract families around the world and could be a major success for Netflix, considering Chicken Run remains the most successful stop-motion movie ever, even 22 years later.
  • luther: Hit detective series with the BBC has a feature film coming to Netflix in Q91. A show that has an outstanding XNUMX percent rating. on Rotten Tomatoes and has been nominated for numerous awards, it could be a hit for those looking for their crime fix.

Let's also not forget that new series from hits such as will appear on Netflix F1: Drive to Survive, You, That '90s Show i Bridgerton.

What will investors pay attention to?

Investor attention will likely be on the adoption of the new ad-supported subscription model and the outlook for 2023. Netflix will stop providing subscriber projections and management will want investors to focus on the revenue that underpins Netflix's entire history.

Netflix original movie content stands out for several reasons:

  • Exclusive content: Netflix Original movies are platform exclusive, which means you can only watch them on Netflix. This exclusivity helps attract and retain subscribers as they may be more willing to pay for a subscription if they know they will have access to unique and high-quality content.
  • Wide attractiveness: Netflix produces a wide variety of movies, from indie movies to big-budget blockbusters. This diversity appeals to a wide audience, which helps attract and retain subscribers from all over the world.
  • Positive Reputation: Netflix original films have received critical acclaim, garnering awards and nominations at major film festivals. This positive reputation helps attract new subscribers as well as retain existing ones by providing a high-quality viewing experience.

Overall, Netflix's original movie content is seen as a key driver of the company's subscriber and revenue growth, and thus a major driver of the company's share price.

About the Author

josh gilbert etoro analystJoshGilbert - market analyst in eToro. He has over 6 years of experience in various positions in financial services. A documented history of work in the financial services industry, consistent achievement of above-average commercial goals led to rapid promotion and internal recognition. He specializes in financial writing, media, risk management, sales, financial markets, CFDs, Forex and stocks

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