00:00 Speaker A
First quarter results for Netflix. They are just hitting the wire now. Let’s take a look at those numbers. Q1 EPS 661, the street was looking for 568. Q1 revenue, 10.54 billion. Consensus was 10.5 billion. I’m just looking for Q2 revenue, 11.04 billion. The street was at 10.88 billion. Q2 EPS, 703. The street was at 624. They looks like they’re saying revenue is tracking above the midpoint of that 2025 forecast. At least an initial reaction here, we’re about 4/10 of a percent. Of course, keep in mind, the stock was up about 60% over the past 12 months. But Ali, what are you seeing so far?
01:03 Ali
Yeah. I mean really strong guidance here, seeing Q2 revenue uh significantly above the estimate. Also, the fact that they’re reiterating their prior guidance for revenue, and also our operating margin is encouraging, especially since we’ve been in this moment where there’s a lot of uncertainty. Netflix, though, has been one of the names that have been viewed as more of a defensive position due to the fact that they are not as exposed to some of the advertising headwinds that you can get with some of those other legacy media and big tech companies. So companies like Paramount, Warner Brothers Discovery, they could actually do worse in this environment. See, even with a company like meta, one of those MAG 7 names, very very exposed to advertising. Netflix is sort of in that sweet spot where they’re not dealing with that. So we have this reiterating of the guidance. We have a beat on the top and bottom lines. If you take a look at shares, they’re up marginally and after hours trading as investors assess this report. We do have a stock that potentially has more room to run. Analysts across the street consistently see this stock trading above $1,000 a share. There have been rumors when you think about potential stock split for company like Netflix. So that’s something that we’ll listen out for on the call and really just further commentary on their live events, on their product rollout. Now that they’re no longer reporting subscriber figures, what is going to be the emphasis on this call? But all in all, very solid report from this company.
03:03 Speaker A
Yeah, it certainly looks like it. And I think probably what we’re seeing here is the, the stay-at-home trend, you know, the, the broad-based discretionary spending, maybe cutting back, but when it comes to, you know, paying 10 bucks a, a month, a little bit more to get those ads out of the way in order to enjoy a Netflix and chill, that, that’s what we’re getting. At least that’s what the, the numbers suggest. Anything under the hood that we can see in terms of what’s driving that beat?
03:44 Ali
Yeah, I mean they, they did say in Q1, they had a lot of solid content. Adolescence, that’s actually a show that’s from abroad which stands out to me when it comes to the global appeal of Netflix. They’re not just focusing on US-based shows, they’re also focusing on content overseas. So all of that is contributing to this Netflix flywheel effect. So they’re, they’re saying they’re continuing to build out their live offering. They have the launch of WWE Raw. They’ve been asked before on these calls whether or not they’re going to bid on UFC rights. Maybe that’ll come up again today when we think about sports and the opportunity there. But, but they, they did say in the release, our revenue and profit growth outlook remains solid. Again, no change to that 2025 guidance.
04:48 Speaker A
All right. Thank you, Ali. Appreciate.