Netflix Earnings Preview: Fiscal Q4 2024

Q4 2024 expectations: Revenues are expected to be supported by the continued paid-sharing, growth of the ads business, and further monetization. While Q3 showed positive trends, questions remain around the investments in the ad tier, increased competition, and its impact on paid sharing.

According to Visible Alpha consensus, the 21.9% margin is expected to be driven by total revenues of $10.1 billion and operating income of $2.2 billion in Q4 2024, up from 16.9% in Q4 2023. These estimates have not changed much since last quarter, and are driven by consistent expectations for U.S. streaming and an uptick ad-supported revenue. It is worth highlighting that since the July quarter, ad-supported revenue has moved back up to $746 million, but is still slightly lower than the initial $788 million revenue expectation at the beginning of FY 2024. In addition, earnings estimates have moved up from $3.87/share to now $4.23/share, since July.

FY 2025 expectations: The company expects to grow revenues by increasing engagement trends and reducing churn with a more diverse entertainment offering, including more live events. Additionally, price hikes are expected in UCAN. Gaming and the growth of ads could be key drivers in 2025. According to consensus, analysts expect the company to generate a 28.4% margin from revenue of $43.8 billion and $12.4 billion in operating profit in FY 2024, which has not changed much since July 2024.

The stock price has traded up around 20% to $828 since last quarter’s release, driven by the resilience in the company’s net adds and the prospects from more live events. Will the outlook for the rest of 2025 support the continued upward trajectory of Netflix’s stock price?

The Direction of Key Netflix Estimates

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