January 20, 2025
Netflix ( NFLX ) is set to report its fiscal fourth quarter earnings on Tuesday after market close. Analysts expect the streamer to deliver strong results after it ended the year with two back-to-back NFL games, a successful "Jake Paul vs. Mike Tyson" boxing match, and the return of "Squid Game."
Netflix stock has stumbled since the start of the year after finishing 2024 at record highs. The stock pullback comes as macroeconomic uncertainties have weighed broadly on megacap Big Tech.
Here's what Wall Street expects for the fourth quarter, according to Bloomberg consensus estimates:
"There are very high expectations going into this quarter," Geetha Ranganathan, senior analyst at Bloomberg Intelligence, told Yahoo Finance's Morning Brief program. "But it's really the perfect setup for Netflix."
Ranganathan called out the company's solid content slate, describing it as "one of their strongest quarters ever," as live sports programming dominated the platform.
Notably, the Jake Paul and Mike Tyson match attracted over 108 million global viewers , becoming the most-streamed sporting event of all time. For context, the 2024 Super Bowl, which was the most-watched American TV broadcast ever , pulled in 124 million US viewers.
Similarly, the NFL games averaged around 30 million viewers . According to Netflix, it was its most-watched Christmas Day game ever in the US.
"It's going to be really interesting to see how [sports] shapes the future of Netflix," Ranganathan said, adding the recent debut of WWE Raw will drive further growth and retention.
"This is really the big shift we're going to see this quarter," she said. "That's going to drive subscriber momentum for Netflix in a big way. We're expecting well over 10 million subscriber additions."
This will be the last earnings report in Netflix's history revealing net subscriber figures. The company announced last spring it would stop reporting the metric at the start of this year.
Investors have recognized the company's efforts over the past year, which, in addition to a strong content slate, have included more advertising successes . According to its latest update, Netflix's ad tier, now two years old, has reached 70 million global monthly active users.
The stock has surged about 80% year over year. It hit several all-time highs in 2024, as many analysts call Netflix the winner of the hard-fought streaming wars.
Still, the company revealed in its latest biannual viewership report that year-over-year engagement levels came in roughly flat — a potential headwind when it comes to its ability to raise prices and boost growth.
Netflix last raised the price of its Standard plan in January 2022 , upping the monthly cost to $15.49 from $13.99. It also raised the price of its Premium tier by $2 to $19.99 a month at the same time; the company again raised the cost of that plan last October to $22.99.
The company has yet to raise the price of its ad-supported offering , which remains one of the cheapest ad plans among all of the major streaming players at $6.99 a month.
"We've been expecting a price increase in the US market for quite a while now," Ranganathan said. "They're definitely long overdue."
The company recently phased out its lowest-priced ad-free streaming plan , making the $15.49 Standard plan its cheapest offering for an ad-free experience.
Valuation has also been a concern, with analysts expecting a downward revision to the company's 2025 revenue outlook, due, in part, to the strengthening dollar. Currently, Netflix anticipates revenue growth between 11% and 13%, a slowdown from last year's 15% growth rate.
"I think they'll temper those revenue growth projections," Ranganathan predicted. "But I think the way that they offset that is with a big price increase, which could happen anytime this year."
Alexandra Canal @allie_canal , LinkedIn,
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