Netflix Inc (NASDAQ:NFLX)’s paid sharing model, a surge in viewers on its advertising tier and price increases are likely to result in a strong rise in earnings when the streaming giant releases fourth-quarter results after the closing bell next Tuesday.
After beating expectations in the third quarter, Netflix raised its 4Q guidance. It expects to report an 11% rise in revenue to $8.7 billion, with a two percentage point improvement in its operating margin to 20%.
Wall Street analysts expect even more, with the consensus forecast sitting at revenue of $8.77 billion. They also expect earnings per share to jump to $2.19, from $0.12 in 4Q 2022.
The company’s advertising president, Amy Reinhard, told a conference on January 10 that active users on its ad tier rose to 23 million in December, up from 15 million in November and 5 million in May.
In December, a report from Insider Intelligence projected that Netflix will rake in more dollars from US advertisers than Disney+ in 2024 due to the move to the ad-supported tier.
The company’s shares were down 0.5% at $489.74 in premarket trading on Tuesday. They climbed 65% in 2023.