NFLX
📈 Netflix reported strong Q1 results with revenue and operating income growing significantly year-over-year, beating guidance due to higher-than-expected subscriptions and ad revenue.
💰 The company is successfully implementing its ad-supported tier, viewing it as a crucial future revenue stream, allowing lower entry prices for consumers while potentially generating more revenue per user than premium tiers.
🚀 Netflix provided positive guidance for Q2, expecting revenue growth to accelerate to 15% and maintaining strong operating margin expansion, reinforcing its position as a leading entertainment company.
@bernardodegarcia:
“Let’s go then with the Netflix results. Netflix Investors… Earnings. It’s here, they’re here. The shares are not moving. Uh, one second. Okay, very interesting. The shares are not moving. Okay, let’s do one thing because you know we love Netflix’s quarterly results. They are like… I don’t know why we like them so much, really. We started analyzing them this way years ago, and here we continue, and here we are… Dear shareholders, we started 2025 well. First quarter revenue and operating income up 27% year-over-year respectively. Both were ahead of our guidance, mainly thanks to having more subscriptions and ad revenue. I mean, I can’t say how important this will be the more time passes. We are executing our 2025 priorities, improving our series and movie offerings, and growing our ads business. I repeat, you don’t know how important ads will be from here on out… We delivered a very good first quarter… We are building our live offerings… Our revenue and profit outlook remains solid, with no changes to our 2025 guidance… Revenue between 43.5 and 44.5 billion and operating margins of almost 29%. We are working very hard to improve and expand our entertainment offerings with the goal of building the most valuable entertainment company for our members, creators, and shareholders… These are our second-quarter results… As you see, they no longer show us… before, if you remember, they did show us… they no longer show us the number of subscribers. Okay, this is something that ended up affecting the shares negatively, but it’s silly. Revenue, as we are seeing, growth goes from 14% last year to 16, 15, 16, 12, 15… Oh, sorry, this is the forecast, 12% for the first quarter of 2025 is the growth we’ve seen, 15%. Mm, okay, not bad, not bad… Operating margins went from 28 to 27, 29, 22 to 31, and will go to 33. Fantastic. Net income 2.3, 1.8, 2.9 almost, and we will reach 3.05. Fantastic. I mean, brutal. And earnings per share of 5.28, 4, 5, 4, 6, and 7… What multiple do we give a company that is growing approximately… at 14% year after year? Okay, let’s leave it at 14%, which is fantastic. But then we are also seeing that its margins are increasing… its margins went from approximately 28 to 33… What multiple do we give a company that grows 14% year after year? Hmm, well, I don’t know… Currently trading at 37 times future earnings… Quite demanding multiples. As long as the market is happy and the company continues to grow well, my biggest concern with Netflix is that the moment one of these figures starts to come down, the multiples can contract quite unpleasantly for shareholders… Free cash flow is a money-making machine… The number of shares, as you are seeing, is reducing. They are buying, although they haven’t repurchased very aggressively… Revenue grew 13% year-over-year… primarily due to memberships and higher prices… Revenue came in above our guidance because more subscriptions arrived and ad revenue, which is still very small in relation to subscription revenue… Operating income reached $3.3 billion, 27% year-over-year. Operating Margin 32 versus 28, both above our forecast thanks to revenue and the timing of expenses… As a reminder, the guidance we provide is our internal forecast… Our main metrics are revenue for growth and operating margin for profit. Our goal is to maintain decent revenue growth, expand operating margins, and deliver ever-growing free cash flow. In the second quarter, we expect revenue to grow 15%. Fantastic… We project operating margins of 33%, approximately six percentage points of improvement year-over-year. Fantastic… We continue to expect to generate between $43.5 and $44.5 billion in revenue for 2025… We are still aiming for 29% in operating margin… We are currently looking at a point above the midpoint of our revenue guidance… Our ad plans allow us to lower the price for consumers while creating a new line of revenue and profit for our business. We continue to make progress building our ad business… A major focus for 2025 has been our ad capabilities. We started with Netflix, our ad technology platform in the United States on April 1st… We want our ad platform… this is directly a competitor to The Trade Desk… Netflix is creating its own ad platform… I think we’ve seen it all. We won’t dwell further… Let me know if you have questions. Probably yes. I liked them, I liked them. I don’t expect… There we have it. They are rising 4%. Ah, I don’t expect them to fall because at first, they were like with a… Ah, they are trading expensive, but well, let’s say there is… certain…”
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