Netflix (NFLX) Q3 2023 Earnings Preview

Netflix Inc. (NASDAQ: NFLX) will report Q3 2023 results on Wednesday, October 18, 2023. Here are the key numbers that we’re watching.

Figure 1: Netflix – consensus expectations for Q3, past earnings surprises, revisions, and CAGR

Source: Visible Alpha consensus (October 16, 2023). “Surprise” indicates the direction that specific line items beat or missed. “Revisions” show the trajectory of line items from a given date.

Netflix Q3 Earnings Preview

According to Visible Alpha consensus, total revenues expected for Q3 have come down slightly from the beginning of the year, from $8.6 billion to $8.5 billion, driven by a decline in expectations for U.S. streaming. However, Q3 expectations for operating income have increased from $1.7 billion at the beginning of the year to $1.9 billion ahead of Q3 earnings.

The stock has traded down -25% since last quarter’s July release and has remained lower (currently around $355-360) from a high of $483 ahead of the July release, driven by concerns around the actors’ and writers’ strikes and the paid-sharing program in the U.S. Could the Q3 release provide a positive catalyst for the stock?

Figure 2: Netflix – consensus revenues, operating income, EPS, and stock performance

Source: Visible Alpha consensus (October 16, 2023). Stock price data courtesy of FactSet. Netflix stock price is as of the market close on October 13, 2023. “Ad-supported revenue – Advertising – UCAN Streaming” is a new line item that recently started to be modeled by analysts.