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LOS ANGELES — Netflix is due to report fourth-quarter earnings after the closing bell on Tuesday.
Wall Street will pay close attention to details related to the company’s advertising-based business model, its recent collection of live sporting events and the continued impact of password cracking on subscriber numbers.
After all, this is expected to be the last time Netflix will report subscriber data to shareholders, as it plans to focus on revenue and other financial metrics as performance indicators.
Here’s what Wall Street expects for the company’s latest quarter:
- Earnings per share: $4.20, according to LSEG
- Income: $10.11 billion, according to LSEG
- Paid memberships: 290.9 million, according to StreetAccount
“Netflix has established a virtually insurmountable advantage in the streaming wars,” Alicia Reese, an analyst at Wedbush, wrote in a recent study. “Netflix can maintain its moat as competitors try to replicate its business model. Although Netflix has rounded off its crackdown on password sharing, we expect its advertising tier to drive revenue growth for several years. Until now, the introduction of ad tiering has limited churn, reducing pressure to add new subscribers , with at least 30 million accounts moving to the ad level in the last six months.”
Reese noted that Netflix is positioned to accelerate its ad revenue as it continues to add more live events, improve ad targeting and establish new partnerships. She said she expects Netflix’s ad tier to be its primary growth driver through 2026.
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