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Q2營收和Q3指引不及預期，奈飛績後大跌
富途研究
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Netflix (NFLX.O) Q2 Earnings Review: Performance guidance falls short of expectations, company accelerates monetization through price adjustments

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Event
Netflix (NFLX.O) released its second quarter report on July 19th Eastern Time, with the stock price dropping 8% after the market closed.
Key Points
The company's profitability has improved, but its performance guidance is lower than expected.
In Q2 23, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid subscribers. The company maintains a strong profitability. Operating profit for Q2 23 was $1.83 billion, YoY +22.3%, mainly due to continuous expense optimization and lower-than-expected content costs. Diluted EPS for Q2 23 was $3.29, YoY +3%.
The company's monetization speed is slow, and its performance guidance is lower than market expectations. The company expects Q3 23 revenue to grow significantly YoY by 7.5% to $8.52 billion, lower than the market's expectation of $8.67 billion. Q3 23 operating profit is expected to increase YoY by 22.2% to $1.89 billion, and net profit is expected to increase to $1.58 billion. Diluted EPS will be $3.52.
The number of new user subscriptions in the second quarter exceeded expectations, while ARM declined slightly.
In Q2 23, the company gained 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations and aligning with our previous forecasts. The growth in new subscribers is mainly due to the impact on shared accounts and low-cost advertising packages. It is expected that new subscriber growth will continue to be an important driver of revenue growth in the second half of the year.
In Q2 23, the company's ARM was $11.6, a slight 1% decline from the previous quarter. In the short term, ARM still faces pressure, with new users mainly coming from low-cost advertising packages and regions with low subscription prices. In the long term, the increase in advertising revenue and the increase in paid sharing revenue will help drive ARM growth, and there is still room for a certain increase in subscription prices.
The company is adjusting its pricing strategy to accelerate monetization.
The account-based sharing policy has been effective. On the day the financial report was released, the company implemented the paid sharing policy in all remaining regions. According to the company's disclosure, the revenue in all regions is higher than before the implementation of the paid sharing policy, which proves that the number of new subscriber additions has exceeded the number of cancellations, and the short-term adverse impact has gradually been absorbed.
The company is adjusting its pricing strategy to promote user migration to low-cost advertising plans. The company announced the cancellation of the $9.99/month basic ad-free plan in Canada, the United States, and the United Kingdom. Whether users migrate to low-cost advertising plans to accelerate ad monetization or migrate to high-paid plans, it is expected to enhance the company's ARM (average revenue per member).
Investment advice:
Looking ahead to the second half of the year, the company's revenue will still be mainly driven by the growth of new users. Considering that it will take time for ad monetization and paid sharing to be realized, it is expected that the performance growth in the third quarter will face pressure, and the revenue growth rate will be lower than market expectations. The company is expected to see a significant increase in revenue in the fourth quarter, and the accelerated promotion of ad monetization is expected to further increase profit growth.
We believe that Netflix's performance in this quarter is not bad. The decline in stock price after the release of the financial report is partly due to the performance outlook falling short of expectations, and partly due to the market's high expectations and the high cumulative increase in stock price since the beginning of the year. In the short term, considering that the company's business monetization will still take time, there is a risk of stock price correction. We recommend adopting a Covered Call strategy to sell high-priced call options and earn option premiums. In the long term, with the acceleration of ad monetization, it is expected that there will be room for ARM improvement. If the company's stock price retraces sufficiently, it will be a good buying opportunity before the fourth quarter report is released.
Risk Warnings
Escalation of the U.S. screenwriters' strike risk; lower-than-expected growth in new users; underperformance of the advertising business; intensified competition in the industry; geopolitical risks; exchange rate fluctuation risks; currency policy risks.
#Use Futubull to analyze earnings# Event Netflix (NFLX.O) released its Q2 earnings report on July 19th EDT, and the stock price dropped 8% after market. Key Points The company's profitability has improved, and the performance guidance is lower than expected. In 23Q2, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid users. The company maintains strong profitability. The operating profit in 23Q2 was $1.83 billion, YoY +22.3%, mainly due to ongoing cost optimization and lower-than-expected content costs. Diluted EPS in 23Q2 was $3.29, YoY +3%. The company's liquidity is relatively slow, and the performance guidance is lower than market expectations. The company expects revenue in 23Q3 to increase significantly by 7.5% YoY to $8.52 billion, lower than the market's expected $8.67 billion. The operating profit in 23Q3 is expected to increase by 22.2% YoY to $1.89 billion, and the net profit will increase to $1.58 billion. Diluted EPS will be $3.52. There was an unexpected increase in user subscriptions in the second quarter, but ARM slightly declined. In Q2 2023, the company added 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations, and basically in line with our forecast in the outlook. The growth in new subscribers is mainly attributed to the impact of shared accounts and low-cost advertising packages. It is expected that the number of new subscribers in the second half of the year will continue to be a key driver of the company's revenue growth. 23...
#Use Futubull to analyze earnings# Event Netflix (NFLX.O) released its Q2 earnings report on July 19th EDT, and the stock price dropped 8% after market. Key Points The company's profitability has improved, and the performance guidance is lower than expected. In 23Q2, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid users. The company maintains strong profitability. The operating profit in 23Q2 was $1.83 billion, YoY +22.3%, mainly due to ongoing cost optimization and lower-than-expected content costs. Diluted EPS in 23Q2 was $3.29, YoY +3%. The company's liquidity is relatively slow, and the performance guidance is lower than market expectations. The company expects revenue in 23Q3 to increase significantly by 7.5% YoY to $8.52 billion, lower than the market's expected $8.67 billion. The operating profit in 23Q3 is expected to increase by 22.2% YoY to $1.89 billion, and the net profit will increase to $1.58 billion. Diluted EPS will be $3.52. There was an unexpected increase in user subscriptions in the second quarter, but ARM slightly declined. In Q2 2023, the company added 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations, and basically in line with our forecast in the outlook. The growth in new subscribers is mainly attributed to the impact of shared accounts and low-cost advertising packages. It is expected that the number of new subscribers in the second half of the year will continue to be a key driver of the company's revenue growth. 23...
#Use Futubull to analyze earnings# Event Netflix (NFLX.O) released its Q2 earnings report on July 19th EDT, and the stock price dropped 8% after market. Key Points The company's profitability has improved, and the performance guidance is lower than expected. In 23Q2, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid users. The company maintains strong profitability. The operating profit in 23Q2 was $1.83 billion, YoY +22.3%, mainly due to ongoing cost optimization and lower-than-expected content costs. Diluted EPS in 23Q2 was $3.29, YoY +3%. The company's liquidity is relatively slow, and the performance guidance is lower than market expectations. The company expects revenue in 23Q3 to increase significantly by 7.5% YoY to $8.52 billion, lower than the market's expected $8.67 billion. The operating profit in 23Q3 is expected to increase by 22.2% YoY to $1.89 billion, and the net profit will increase to $1.58 billion. Diluted EPS will be $3.52. There was an unexpected increase in user subscriptions in the second quarter, but ARM slightly declined. In Q2 2023, the company added 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations, and basically in line with our forecast in the outlook. The growth in new subscribers is mainly attributed to the impact of shared accounts and low-cost advertising packages. It is expected that the number of new subscribers in the second half of the year will continue to be a key driver of the company's revenue growth. 23...
#Use Futubull to analyze earnings# Event Netflix (NFLX.O) released its Q2 earnings report on July 19th EDT, and the stock price dropped 8% after market. Key Points The company's profitability has improved, and the performance guidance is lower than expected. In 23Q2, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid users. The company maintains strong profitability. The operating profit in 23Q2 was $1.83 billion, YoY +22.3%, mainly due to ongoing cost optimization and lower-than-expected content costs. Diluted EPS in 23Q2 was $3.29, YoY +3%. The company's liquidity is relatively slow, and the performance guidance is lower than market expectations. The company expects revenue in 23Q3 to increase significantly by 7.5% YoY to $8.52 billion, lower than the market's expected $8.67 billion. The operating profit in 23Q3 is expected to increase by 22.2% YoY to $1.89 billion, and the net profit will increase to $1.58 billion. Diluted EPS will be $3.52. There was an unexpected increase in user subscriptions in the second quarter, but ARM slightly declined. In Q2 2023, the company added 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations, and basically in line with our forecast in the outlook. The growth in new subscribers is mainly attributed to the impact of shared accounts and low-cost advertising packages. It is expected that the number of new subscribers in the second half of the year will continue to be a key driver of the company's revenue growth. 23...
#Use Futubull to analyze earnings# Event Netflix (NFLX.O) released its Q2 earnings report on July 19th EDT, and the stock price dropped 8% after market. Key Points The company's profitability has improved, and the performance guidance is lower than expected. In 23Q2, the company achieved revenue of $8.187 billion, YoY +2.7%, mainly driven by the growth of paid users. The company maintains strong profitability. The operating profit in 23Q2 was $1.83 billion, YoY +22.3%, mainly due to ongoing cost optimization and lower-than-expected content costs. Diluted EPS in 23Q2 was $3.29, YoY +3%. The company's liquidity is relatively slow, and the performance guidance is lower than market expectations. The company expects revenue in 23Q3 to increase significantly by 7.5% YoY to $8.52 billion, lower than the market's expected $8.67 billion. The operating profit in 23Q3 is expected to increase by 22.2% YoY to $1.89 billion, and the net profit will increase to $1.58 billion. Diluted EPS will be $3.52. There was an unexpected increase in user subscriptions in the second quarter, but ARM slightly declined. In Q2 2023, the company added 5.89 million new subscribers, a significant increase compared to the previous quarter (1.75 million), exceeding market expectations, and basically in line with our forecast in the outlook. The growth in new subscribers is mainly attributed to the impact of shared accounts and low-cost advertising packages. It is expected that the number of new subscribers in the second half of the year will continue to be a key driver of the company's revenue growth. 23...
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Netflix (NFLX.O) Second Quarter Earnings Review: Performance guidance fell short of expectations, company accelerating pricing adjustments for faster monetization - Futu Securities - 230720.pdf449.2K
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Risk Disclaimer: The above content only represents the author's view. It does not represent any position or investment advice of Futu. Futu makes no representation or warranty.Read more
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