Netflix's Q4 performance was excellent, but the Q1 guidance was disappointing. The company suspended its buyback for the acquisition of Warner, and the stock fell over 5% in after-hours trading. | Earnings Report Insights
Although foreign exchange fluctuations are unfavorable, Netflix's revenue in the fourth quarter still exceeded expectations with a year-on-year increase of nearly 18% due to stronger-than-expected growth in paid users and advertising sales. By the end of the year, the number of subscription users surpassed 325 million, an increase of nearly 8% year-on-year. The profit guidance for the first quarter fell far short of expectations, with the EPS guidance more than 7% lower than analysts' expectations, and the full-year operating profit margin below expectations. Netflix stated that the full-year guidance includes approximately $275 million in acquisition-related expenses and plans to increase spending on film and television content by 10% for the year; it is expected to continue raising prices this year, with total advertising revenue doubling from last year to $3 billion
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