Netflix Q4 Earnings Preview: Is the Streaming Giant Still a Blockbuster?

Key points:

• Final Subscriber Metrics: Netflix’s Q4 2024 results will reveal its last-ever subscriber numbers, with projections of over 9 million net additions. The focus is shifting to profitability and revenue growth, signaling its maturity as a business.
• Strong Performance: Analysts expect revenue of $10.1 billion (up 15% YoY) and EPS of $4.18, highlighting Netflix’s ability to scale profitability while expanding new revenue streams like ad-supported plans and live sports.
• Challenges Ahead: While Netflix had a stellar 2024, slowing growth (12% forecasted for 2025), rising content costs, and intense competition will test its ability to maintain momentum in the coming year.

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Netflix (NFLX) is ready to stream its Q4 2024 earnings this Tuesday, January 21, 2025, after the market closes. Following a binge-worthy performance last year—with the stock soaring 83%—investors are eagerly waiting to see if Netflix can keep delivering or if we’re about to witness a plot twist.

As the streaming landscape gets more crowded and competitive, this report will provide clues about Netflix’s ability to stay in the spotlight. As the streaming leader prepares to stop reporting subscriber metrics in 2025, this report will offer vital clues about Netflix’s transition from subscriber-driven growth to profitability-focused innovation. Is this a sign of maturity, or does it hint at slowing momentum? Let’s dive into the next episode of Netflix’s growth story and what it means for your portfolio.

2024: A Blockbuster Year in Review

Last year, Netflix delivered a must-watch performance and proved it could do more than just stream great shows—it showed it could play to win in a competitive and evolving market. From the smashing success of hit originals like Squid Game 2 and Wednesday to a bold expansion into live sports like NFL games and boxing, Netflix kept audiences and investors hooked.

The company also doubled down on its ad-supported subscription tier, with over 50% of new sign-ups choosing this lower-cost plan. Add a strategic crackdown on password sharing, and Netflix unlocked millions of new paying users while improving profitability. As a result, revenue grew steadily, profits soared, and the company raised its operating margin guidance for 2024 to an impressive 27%.

What to Expect in Q4 Earnings

Netflix’s Q4 earnings will cap a stellar year, but it’s also a preview of what’s to come. Here’s what you should add to your watchlist:

• Earnings Per Share (EPS): Analysts predict $4.18, nearly doubling year-over-year, highlighting Netflix’s ability to turn scale into profitability.
• Revenue: Estimated at $10.1 billion, up 15% year-over-year, thanks to a strong content lineup and growing ad revenue.
• Subscriber Growth: This is Netflix’s final quarter reporting subscriber numbers, and analysts expect a big finish. Projections suggest net additions could double Q3’s 5.1 million, bringing the total global subscriber base close to 292 million.

No More Subscriber Metrics

Netflix’s decision to stop reporting subscriber numbers starting in 2025 has sparked mixed reactions. Netflix argues that subscriber metrics no longer capture its full performance. With new revenue streams like advertising and paid-sharing features gaining traction, the company wants to highlight profitability and operational efficiency.

Critics, however, see this as a response to slowing subscriber growth, particularly after the initial boost from the password-sharing crackdown fades. Others worry that reduced transparency could limit insights into regional performance or market saturation. While the shift signals Netflix’s maturity as a business, it also puts pressure on the company to deliver consistent revenue and profit growth to justify its valuation.

 

The Big Growth Drivers

Netflix’s strategy isn’t just about keeping viewers tuned in—it’s about reimagining the entire streaming experience. So, in terms of what’s driving its future success, here is some things you should look out for:

1. Content That Delivers: The formula is simple: invest in content that people can’t stop watching. With upcoming blockbusters like Stranger Things and a packed 2025 slate, Netflix continues to dominate.

2. The Rise of Ads: Netflix’s ad-supported plan has been a hit, attracting budget-conscious consumers while delivering engagement metrics on par with premium plans. The launch of an in-house ad server could unlock further revenue potential.

3. Live Sports: A New Frontier: Netflix has scored with live sports, and it has brought in millions of viewers for high-profile events like the Mike Tyson-Jake Paul boxing match. Live events have the potential to redefine streaming, so expect it to become an even bigger part of Netflix’s strategy in 2025.

4. Margins in Focus: Netflix isn’t just growing revenue—it’s becoming more profitable. The company’s operating margin guidance of 27% for 2024, with a goal of 28% in 2025, underscores its commitment to efficiency and sustainable growth.

What Could Go Off-Script?

As every binge-watcher knows, every great story has its ups and downs, and Netflix is no exception. While Netflix has been streaming success, challenges loom on the horizon:

• Slowing Growth in 2025: Revenue is expected to grow 12% in 2025, slower than 2024’s pace. Investors will want to see a clear strategy for maintaining momentum.
• Rising Costs: Premium content and live sports require significant investments, testing Netflix’s ability to balance growth and profitability.
• Intense Competition: Rivals like Disney+, Amazon Prime, and Apple TV+ are upping their game, forcing Netflix to innovate faster to stay ahead.

Is the Price too High?

Netflix closed at $858.10 on January 17, 2025, down 3.7% year-to-date after an extraordinary 2024. Trading at 35x forward earnings, the stock remains expensive, but its strong profitability and strategic pivots could justify the price tag for long-term investors—if Netflix delivers on its ambitious goals.

The Next Episode for Netflix

Netflix’s Q4 earnings report is more than just a recap of a stellar year—it’s the start of a new chapter. The decision to shift focus from subscriber metrics to profitability marks a turning point, reflecting Netflix’s evolution into a mature, diversified business.

For investors, the message is clear: Netflix still has potential, but the days of rapid subscriber growth are behind us. As the company transitions to prioritizing revenue and margin expansion, this earnings call will provide valuable insights into its long-term strategy. So, grab your popcorn and tune in. Netflix’s next season is about to begin.