Quarterly Outlook
Q3 Investor Outlook: Beyond American shores – why diversification is your strongest ally
Jacob Falkencrone
Global Head of Investment Strategy
Global Head of Investment Strategy
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.
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%.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:
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.
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: