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Netflix's Q2 2024 earnings preview: the fight to stay on top

Netflix is set to announce its Q2 2024 earnings on 19 July, with expectations of robust revenue and earnings growth.

Netflix app Source: Adobe images

When will Netflix report its latest earnings?

Netflix is set to release its second-quarter (Q2) 2024 earnings on Friday, 19 July, at 6.00am (AEST) after the US market opens.

Highlights of the previous quarter

As Netflix gets ready to announce its Q2 earnings for 2024, investors want to know if the popular streaming service can keep attracting lots of new subscribers, make the most of its ad-supported plans, and remain the top streaming platform.

In the first quarter (Q1) of 2024, Netflix added 9.3 million net subscribers, grew global paid memberships 16% year-on-year (YoY) to 269.6 million, and increased average revenue per membership 1% YoY (or 4% on an FX-neutral basis). Engagement remained solid despite changes like paid sharing.

What to expect in Q2?

  • Company forecast: Netflix expects its revenue to increase 16% YoY, reaching $9.49 billion
  • Analysts predictions: analysts forecast slightly higher revenue at $9.53 billion, marking a 15% increase from the prior year.

Operating income:

  • Q2 2024 forecast: operating income is at $2.52 billion, with an operating margin of 26.6%
  • Comparison to Q2 2023: $1.82 billion operating income and a 22.3% margin
  • Comparison to Q1 2024: $2.63 billion operating income $2.63 billion and a 28.1% margin.

Revenue growth:

  • Netflix expects 21% YoY FX-neutral revenue growth in Q2 2024.

Membership metrics:

  • Paid net additions: expected to be lower in Q2 compared to Q1 due to seasonal trends
  • Global average revenue per membership (ARPU): predicted to increase YoY on an FX-neutral basis in Q2.

Netflix sales revenue chart

Netflix sales revenue chart Source: TradingEconomics
Netflix sales revenue chart Source: TradingEconomics

Stock performance

Netflix forecasts net income of $2.06 billion, or $4.68 per share, whereas analysts estimate Q2 earnings per share (EPS) will reach $4.74. For comparison, in Q2 2023, Netflix reported net income of $1.48 billion, or $3.29 per share. Net income in Q1 2024 was $2.3 billion, or $5.28 per share.

Analyst outlook

Overall, analysts maintain a ‘Buy’ rating for Netflix. The LSEG Data & Analytics data indicates 11 out of 46 analysts recommend ‘Strong Buy’ and 18 of the 46 recommend ‘Buy’.

Netflix recommendations

Netflix analyst chart Source: Refinitiv
Netflix analyst chart Source: Refinitiv

Technical analysis

The Netflix share price, up over 45% year-to-date, is nearing its November 2021 record high at $700.99. Given this high is close to the significant $700 mark, it may not be easily surpassed.

A rise above $700.99 would target the $750 region. The daily chart shows Netflix has been range-bound since late June but recently hit a July high of $697.49, near the record peak.

Support is found at the May-to-July uptrend line at $678.42. Below this, strong support lies between $633.78 and $662.30, maintaining the short-term uptrend.

A medium-term top would form if Netflix falls below the $626.44 June low. Above this, the April high at $639.00 should provide support.

Netflix daily chart

Netflix daily chart Source:
Netflix daily chart Source:

Netflix monthly chart

Netflix monthly chart Source:
Netflix monthly chart Source:

This information has been prepared by IG, a trading name of IG Australia Pty Ltd. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients.

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