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Mar 31, 2022
Netflix Q1 2022 Earnings Report
Revenue growth slowed considerably due to household penetration and competition, while operating margin was held at around 20%.
Key Takeaways
Netflix's revenue growth slowed in Q1 2022, impacted by household penetration, account sharing, and competition. The company reported revenue of $7.868 billion and EPS of $3.53. While working to reaccelerate revenue growth, Netflix is holding its operating margin at around 20%.
Revenue growth has slowed considerably due to high household penetration and competition.
Netflix is focusing on improving service and monetizing multi-household sharing to reaccelerate revenue growth.
Operating margin will be held at around 20% while working to reaccelerate revenue growth.
Netflix is doubling down on story development and creative excellence.
Revenue by Segment
Revenue by Geographic Location
Forward Guidance
For Q2 2022, Netflix forecasts paid net additions of -2.0 million and revenue growth of approximately 10% year over year. They still target a 19%-20% operating margin for the full year 2022.
Positive Outlook
- Continued improvement in broadband and smart TV penetration globally.
- Large future growth potential with over half of the world’s broadband homes not yet subscribing to Netflix.
- Focus on improving content quality and recommendations to reaccelerate viewing and revenue growth.
- Efforts to monetize sharing represent a large short- to mid-term opportunity.
- Commitment to steadily growing operating margin once revenue growth is re-accelerated.
Challenges Ahead
- Slower revenue growth than desired.
- COVID boost to streaming obscured the picture until recently.
- Account sharing is making it harder to grow membership in many markets.
Revenue & Expenses
Visualization of income flow from segment revenue to net income
Historical Earnings Impact
Analyze how earnings announcements historically affect stock price performance
Avg. Return Before/After Earnings
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