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Dec 31, 2021
Netflix Q4 2021 Earnings Report
Netflix reported a 16% increase in revenue and EPS of $1.33 for Q4 2021, with global streaming paid memberships reaching 222 million.
Key Takeaways
Netflix's Q4 2021 earnings showed a 16% year-over-year revenue growth, reaching $7.709 billion. The company's EPS was $1.33, and it concluded the quarter with 222 million paid memberships, including 8.3 million net additions. However, operating margin decreased to 8% due to a large content slate.
Q4 revenue grew 16% year over year, driven by a 9% increase in average paid memberships.
Global streaming paid memberships reached 222 million with 8.3 million paid net additions in Q4.
UCAN region added 1.2 million paid memberships, marking the strongest quarter of member growth since early 2020.
EMEA was the largest contributor to paid net adds in Q4, exceeding $2.5 billion in quarterly revenue for the first time.
Netflix
Netflix
Netflix Revenue by Segment
Netflix Revenue by Geographic Location
Revenue by Segment
UCAN Revenue
CapyFin.comEMEA Revenue
CapyFin.comLATAM Revenue
CapyFin.comAPAC Revenue
CapyFin.comRevenue by Geographic Location
UCAN Revenue
CapyFin.comEMEA Revenue
CapyFin.comLATAM Revenue
CapyFin.comAPAC Revenue
CapyFin.com Forward Guidance
For Q1 2022, Netflix forecasts paid net additions of 2.5 million, compared to 4.0 million in the prior year quarter. The guidance reflects a back-end weighted content slate and the impact of COVID-19 and macroeconomic hardship in some regions.
Positive Outlook
- Retention and engagement remain healthy.
- Targeting an operating margin of 19%-20% for 2022.
- Believe they can adjust pricing and cost structure for a stronger US dollar world over the medium term.
- Prioritize cash to reinvest in core business and fund new growth opportunities like gaming.
- Anticipate being free cash flow positive for the full year 2022 and beyond.
Challenges Ahead
- Acquisition growth has not yet re-accelerated to pre-Covid levels.
- Ongoing Covid overhang and macro-economic hardship in several parts of the world like LATAM.
- US dollar has strengthened meaningfully against most other currencies, costing roughly $1 billion in expected 2022 revenue.
- Estimated two percentage point negative impact on 2022 operating margin due to US dollar appreciation.
- Don't want to over-react to F/X fluctuations to the detriment of long term growth.
Revenue & Expenses
Visualization of income flow from segment revenue to net income