Netflix Inc., one of the world’s leading entertainment services companies based in California, which engages in paid streaming and the production of films and series, is scheduled to report its Q3 2024 earnings on 17th October (Thursday), after market close. Netflix is ranked the world’s 31st most valuable company by market cap, at over $300B.
Number of Netflix Paid Subscribers Worldwide (in millions). Source: DemandSage
Netflix remains as a conglomerate in the streaming service market, with over 277.65 million paid subscribers worldwide as of Q2 2024, an increase of 8 million subscribers from the previous quarter, and over 17 million subscribers from those recorded in 2023.
SVOD Market Share in U.S. Source: Statista
The company’s consistent slate of programming, cracking down on password and account sharing, as well as its push into advertising via less expensive ad tier have continued to contribute into boosting the addition of new subscribers. In the US, Netflix and Amazon Prime Video dominated the SVOD market share, at 22% each.
Netflix ARPU. Source: Statista
In the United States and Canada region, Netflix average revenue per membership (ARPU) is at $17.17, down slightly -0.75% (or -13 cents) from previous quarter, but up over 7% from the same period last year. Nevertheless, Netflix ARPU remains well ahead of most of its competitors. On the other hand, Netflix’ ARPU in the international markets is still facing challenges, , such international disparities shall be resolved with its ad-supported tier, now responsible for more than 45% of sign-ups in the 12 countries where it is available.
Netflix: Income Statement Evolution (Quarterly Data). Source: Market Screener
Projection for sales revenue in the coming quarter stood at $9.76B, slightly up over 2% from the previous quarter, and up over 14% from the same period last year. Operating profit and net income are projected slightly higher from the previous quarter, at $2.71B and $2.22B respectively. Operating margin and net margin are expected to remain flat at 27.71% (was 27.23%) and 22.76% (was 22.46%) respectively.
Technical Analysis:
#Netflix share price formed a new ATH last week at $735.25, currently remaining supported above $700.20, a former ATH seen in November 2021. The asset is currently trading within an ascending channel, in which a break of the top line may indicate bullish continuation, towards the next resistance at $806, a FE 61.8% level. On the other hand, a retrace below the said support may suggest technical correction, with the bottom line of ascending channel comes into test, followed by $585 (FR 78.6% extended from the former ATH to the lows in May 2022).
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Larince Zhang
Market Analyst
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