Netflix's fourth-quarter net profit surged 1,605%, with revenue rising 12.5% ​​to a new high of $8.833 billion

According to Netflix’s financial report, as of the fourth quarter of fiscal year 2023, the company’s revenue reached US$8.833 billion, a year-on-year increase of 12.5%. In terms of net profit, it reached US$938 million, an increase of more than 16 times compared with US$55 million in the same period last year. These figures demonstrate Netflix's significant growth and profitability improvements over the past year.

Netflix’s revenue in the fourth quarter beat Wall Street analysts’ expectations, but earnings per share missed expectations. In terms of future performance prospects, Netflix's revenue forecast for the first quarter of fiscal 2024 is slightly lower than expected, but its earnings per share forecast exceeds expectations.

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The number of new paying users of Netflix’s new streaming service worldwide in the fourth quarter grew faster than analysis teacher’s expectations. As a result, Netflix's stock price rose sharply in after-hours trading after the earnings report was released, rising more than 8%.

Main results for the fourth quarter:

Net profit:

In the fiscal quarter ended December 31, Netflix’s net profit increased significantly, reaching $938 million. , an increase of more than 16 times compared with US$55 million in the same period last year. Diluted earnings per share were $2.11, up from $0.12 in the same period last year. However, the results fell short of analysts' expectations. According to data provided by Yahoo Finance, 34 analysts had expected Netflix to earn $2.22 per share in the fourth quarter.

Revenue:

Netflix achieved revenue of US$8.833 billion in the fourth quarter, a year-on-year increase of 12.5%, exceeding analysts’ previous expectations. According to data provided by the Yahoo Finance website, 31 analysts on average expected Netflix's fourth-quarter revenue to be US$8.72 billion.

According to geographical breakdown, Netflix’s streaming service revenue from the US and Canadian markets in the fourth quarter was US$3.931 billion, an increase from US$3.595 billion in the same period last year. Revenue from streaming services in the Europe, Middle East and Africa market was US$2.784 billion, an increase from US$2.350 billion in the same period last year. Revenue from the Latin America region was US$1.156 billion, an increase from US$1.017 billion in the same period last year. Revenue in the Asia-Pacific region was US$963 million, a certain increase from US$857 million in the same period last year. This shows that Netflix has achieved steady growth in markets around the world.

Operating profit:

Netflix’s operating profit in the fourth quarter was US$1.496 billion, a significant increase from US$550 million in the same period last year, a year-on-year growth rate of 171%. Operating profit margin was 16.9%, an increase from 7.0% in the same period last year. This growth is primarily attributable to an increase in Netflix's subscriber base and returns on content investments. These figures further demonstrate Netflix's strong position in the video streaming market and its potential for continued growth.

Cash flow information:

Netflix’s net cash from business operating activities in the fourth quarter was US$1.663 billion, a significant increase from US$444 million in the same period last year; free cash flow was 1.581 billion US$332 million, a significant increase from US$332 million in the same period last year.

Costs and Expenses:

Netflix’s revenue costs in the fourth quarter were US$5.307 billion, a decrease from US$5.404 billion in the same period last year; marketing expenses were US$917 million, a high Compared with US$832 million in the same period last year; technology and R&D expenses were US$673 million, slightly lower than US$674 million in the same period last year; general and administrative expenses were US$439 million, higher than US$392 million in the same period last year.

Paid users:

Netflix added 13.12 million new paid subscribers to its streaming service globally in the fourth quarter, up from 7.66 million in the same period last year and exceeding analyst expectations. According to data provided by financial analysis agency StreetAccount, analysts on average had expected that Netflix would add 8 million to 9 million new paying subscribers to its streaming service worldwide in the fourth quarter. As of the end of the fourth quarter, Netflix's global streaming service had 260.28 million paying subscribers, up 12.8% from 230.75 million a year earlier.

By region:

- The total number of paying users of Netflix’s streaming video service in the United States and Canada reached 80.13 million in the fourth quarter, compared with 74.3 million in the same period last year; net increase in the number of paying users There were 2.81 million people, compared with 910,000 people in the same period last year.

- The total number of paying users of Netflix’s streaming video services in Europe, the Middle East and Africa in the fourth quarter reached 88.81 million, compared with 76.73 million in the same period last year; the net increase in the number of paying users was 5.05 million, compared with the same period last year. to 3.2 million people.

- Netflix’s Latin American streaming video service had a total of 46 million paying subscribers in the fourth quarter, compared with 41.7 million in the same period last year; net additions of paid subscribers were 2.35 million, compared with 1.76 million in the same period last year people.

- The total number of paying users of Netflix’s streaming video services in the Asia-Pacific region reached 45.34 million in the fourth quarter, compared with 38.02 million in the same period last year; the net increase in the number of paying users was 2.91 million, compared with 1.8 million in the same period last year. people.

From the perspective of average revenue per user, Netflix’s average revenue per user by region in the fourth quarter is as follows:

- The average revenue per user of streaming video services in the United States and Canada was US$16.64, an increase of 3% compared with US$16.23 in the same period last year, and excluding the impact of currency changes, it was also a year-on-year increase of 3%;

- Average revenue per user of streaming video services in Europe, the Middle East and Africa was US$10.75, an increase of 3% compared with US$10.43 in the same period last year, and a decrease of 1% year-on-year excluding the impact of currency changes;

- Average revenue per user of streaming video services in Latin America was US$8.60, an increase of 4% compared with US$8.30 in the same period last year, and a year-on-year increase of 16% excluding the impact of currency changes;

- The average revenue per user of streaming video services in the Asia-Pacific region was US$7.31, a decrease of 5% compared with US$7.69 in the same period last year. Excluding the impact of exchange rate changes, the average revenue per user was a decrease of 4% year-on-year.

Key results for fiscal year 2023:

For the entire fiscal year 2023, Netflix revenue was US$33.723 billion, an increase compared with US$31.616 billion in fiscal 2022. This performance exceeded the analysis Analysts expected; net profit was US$5.408 billion, compared with US$4.492 billion in fiscal 2022; diluted earnings per share were US$12.03, compared with US$9.95 in fiscal 2022. This performance failed to meet analyst expectations.

According to data provided by Yahoo Finance Channel, 40 analysts had previously expected Netflix's full-year revenue to reach US$33.61 billion on average, and 36 analysts had previously expected Netflix's full-year earnings per share to reach US$12.1 on average. .

Netflix’s operating profit in fiscal year 2023 was US$6.954 billion, compared with US$5.633 billion in fiscal year 2022; operating profit margin was 20.6%, compared with 17.8% in fiscal year 2022. Excluding restructuring expenses, Netflix's adjusted operating profit in fiscal year 2023 was US$7.080 billion, compared with US$6.531 billion in fiscal year 2022; adjusted operating profit margin was 20.9%, compared with 20.0% in fiscal year 2022.

Performance Outlook:

Netflix expects the company’s revenue to reach US$9.240 billion in the first quarter of fiscal 2024, a year-on-year increase of 13.2%, slightly lower than analysts’ expectations; operating profit will be Reaching US$2.420 billion, the operating profit margin will reach 26.2%; net profit will reach US$1.976 billion, and earnings per share will reach US$4.49, exceeding analyst expectations.

According to data provided by Yahoo Finance, 22 analysts on average expect Netflix’s first-quarter revenue to reach US$9.3 billion, and 24 analysts on average expect Netflix’s first-quarter earnings per share to reach US$4.1. .

Share price changes:

On that day, Netflix’s stock price rose $6.48 in regular trading on the Nasdaq Securities Market, closing at $492.19, a decrease of 1.33%. In the subsequent after-hours trading as of 5:33 pm Eastern Time on Tuesday (6:33 am Beijing time on Wednesday), Netflix's stock price rose sharply again by US$39.67 to US$531.86, an increase of 8.06%, breaking through the 52-week mark. Highest price. As of Tuesday's close, Netflix's high price in the past 52 weeks was $503.41 and its low price was $285.33.

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