Netflix (Nasdaq: NFLX) reported Q3 earnings after the bell today. Shares of Netflix were up 61% in the past year, headed into today’s earnings, so the company faced lofty expectations. The initial headline that hit newswires when Netflix reported certainly looked very bad.The company reported EPS of $5.87 versus Wall Street’s expectations of $6.95 in EPS.
Yet, as Netflix clarified in its shareholder letter, a big reason for that EPS shortfall was a tax dispute with Brazilian authorities. Overall, operating income appears on track, and expenses related to that tax dispute are a one-time figure.
In Q4, Netflix projects $11.96 billion in revenue, which is slightly above Wall Street’s expectations of $11.9 billion. Overall, these weren’tbadearnings by any stretch, and certainly weren’t as bad as the company’s EPS miss might have looked when earnings first hit newswires.
Yet, as we noted at the beginning, with shares up 61% in the past year, expectations are high. Netflix merely matched Wall Street’s revenue expectations last quarter, delivering $11.51 billion in revenue. That’s certainly disappointing for a company that’s topped EPS expectations in 14 out of the last 16 quarters headed into today’s earnings.
Here are more details from our live blog covering Netflix’s earnings.
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Adj. EPS: $5.87 [✅];Misses Wall St Expectations of $6.95
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Revenue: $11.51B (Est. $11.51B) [✅]; [UP] +17.2% YoY
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Adj. Gross Margin: 28.2% [⚠️]; [DOWN] -50 bps YoY
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Net Income: $2.55B [✅]; [UP] +8% YoY
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Operating Income: $3.25B (Est. $3.25B) [✅]; [UP] +12% YoY
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Free Cash Flow: $2.66B; [UP] +21% YoY
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Effective Tax Rate: 18.1% (vs. 12.6% YoY)
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Revenue: $11.96B (Est. $11.9B) [✅]
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Expected revenue growth of 17% driven by growth in members, pricing, and ad revenue.
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Projected operating margin of 23.9%, a two percentage point year-over-year improvement.
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UCAN Revenue: $5.07B (Est. $5.07B) [✅]; [UP] +17% YoY
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EMEA Revenue: $3.70B (Est. $3.70B) [✅]; [UP] +18% YoY
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LATAM Revenue: $1.37B (Est. $1.37B) [✅]; [UP] +10% YoY
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APAC Revenue: $1.37B (Est. $1.37B) [✅]; [UP] +21% YoY
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Adj. Operating Income: $3.25B (Est. $3.25B) [✅]; [UP] +12% YoY
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Adj. Operating Expenses: $8.26B (Est. $8.26B) [✅]; [UP] +10% YoY
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R&D Expenses: $853.58M (Est. $853.58M) [✅]; [UP] +16% YoY
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Net Cash Provided by Operating Activities: $2.83B; [UP] +22% YoY
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Shares Outstanding: 434.0M
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Gross Debt: $14.46B
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Cash and Cash Equivalents: $9.29B
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Greg Peters: “We’re finishing the year with good momentum and have an exciting Q4 slate, including the final season of Stranger Things and new seasons of The Diplomat and Nobody Wants This.”
Source : Yahoo Finance
