Netflix Q4 2023 Earnings Report
Key Takeaways
Netflix ended the year with strong growth, achieving key financial objectives set at the start of 2023. Revenue grew by 12%, the operating margin reached 21%, and free cash flow increased to $6.9 billion.
Revenue in Q4 grew 12% year over year, or 13% on a foreign exchange (F/X) neutral basis.
Paid net additions totaled 13.1M in Q4’23, the largest Q4 ever.
Operating income amounted to $1.5B, up from $0.5B in the year ago period, while operating margin improved to 17% vs. 7% in the year ago quarter.
EPS for the fourth quarter was $2.11 compared with $0.12 last year.
Netflix
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Netflix Revenue by Segment
Forward Guidance
Netflix anticipates healthy double-digit revenue growth for the full year 2024 on a F/X neutral basis, driven by continued membership growth and improvement in F/X neutral ARM as prices are adjusted.
Positive Outlook
- Healthy double digit revenue growth for the full year 2024 on a F/X neutral basis driven by continued membership growth
- Improvement in F/X neutral ARM as prices are adjusted
- Strong growth in the ads business
- Global ARM to be up year over year on a F/X neutral basis in Q1
- Increasing full year 2024 operating margin forecast from 22%-23% to 24%
Challenges Ahead
- Q1’24 revenue growth includes a three percentage point headwind from F/X on a year over year basis
- Paid net additions to be down sequentially
- Some lumpiness in year to year FCF progression
- Not fully hedged, which is why we are still guiding and managing to a F/X neutral operating margin target.
- Strikes pushing back the launch of some titles
Revenue & Expenses
Visualization of income flow from segment revenue to net income