Investors are anticipating news of Netflix’s subscriber numbers and the performance of its recently debuted ad-supported tier when the streaming giant releases its fourth quarter financial results once trading commences on Thursday.
While subscriber numbers declined during the first three quarters of 2022, investors expect them to have risen over Q4. The company’s crackdown on password sharing is also at center stage.
Estimates for Netflix’s fourth-quarter financial results include revenue of $7.85 billion, adjusted earnings per share of $0.58, and an addition of 4.5 million net subscribers. Several analysts polled by Bloomberg expect Netflix to beat revenue expectations following the release of highly popular content such as Glass Onion, Troll, and Wednesday.
Given its release in November, investors are not likely to see the full impact of Netflix’s ad tier. According to data from third-party research firm YipitData, Ad-based gross subscriber additions consist of 15% of total subscriber gross additions.
Wells Fargo’s Steve Cahall expressed the bank’s belief that password sharing will be a major focal point to consider when assessing the streaming platform’s performance going forward. “While much of the sellside and buyside focus of late has been the [advertising video-on-demand] launch, we actually think disclosure will be limited as will the impact on estimates. Instead, we think password sharing is the bigger catalyst near term,” he explained