- Revenue $9.83bn vs $9.77bn expected
- 5.1mn new paid subscribers vs 4.5mn expected
- EPS $5.40 vs $5.12 expected
Matt Britzman, senior equity analyst, Hargreaves Lansdown:
“Netflix has brushed aside expectations once again, with beats everywhere you look from subscribers to earnings, and a confident set of fourth quarter estimates to top it all off. One could argue that the 4-5% share price move in after-hours trading is frothy given the beats on the top line and subscriber numbers were both relatively small, but there’s no denying the current backdrop makes for good reading if you’re a Netflix fan.
Peers in the legacy media space are losing money hand over fist, meaning Netflix can push its advantage in content creation while others can’t stomach allocating more capital. Ads are also in the mix for next year, and price hikes that have already begun in some markets have the potential to squeeze more from existing subscribers.
One key question is around how much price elasticity Netflix really has, this is inherently a fickle market, with consumers happy to swap streamer if they don’t think they’re getting value. The addition of fresh content is key to that, especially in areas like sporting events, and could give Netflix the edge it needs to push prices higher and keep customers coming back for more.”
