Netflix beats expectations, adds more than 7 million subscribers in Q4

Netflix has released its fourth quarter results. The revenue, operating profit and membership growth exceeded its forecast. The streamer continues to lead the industry in streaming engagement, revenue and profit.
For 2022, the streamer finished with 231M paid memberships and generated $32B of revenue, $5.6B in operating income, $2.0B of net cash from operating activities and $1.6B of free cash flow (FCF).
In 2023, it expects at least $3B of FCF, assuming no material swings in F/X.

Th Q4 content slate outperformed even its high expectations: Wednesday was its third most popular series ever, Harry & Meghan the second most popular documentary series, Troll our its popular non-English film, and Glass Onion: A
Knives Out Mystery its fourth most popular film.
“We successfully launched our new, lower priced ad-supported plan in November and are pleased
with the early results, with much more still to do. We delivered on the high end of our operating profit margin target for full year 2022, and we expect to increase our operating margin in 2023 vs. 2022,” Netflix said in a letter to shareholders.

The streaming giant said that 2022 was a tough year, with a bumpy start but a brighter finish.
“We believe we have a clear path to reaccelerate our revenue growth: continuing to improve all aspects of Netflix, launching paid sharing and building our ads offering. As always, our north stars remain pleasing our members and building even greater profitability over time.
Operating income of $550M in Q4 was down vs. $632M in Q4 ‘21. This was above our guidance forecast
of $330M primarily due to higher than expected revenue as well as slower-than-forecasted hiring. Operating margin for Q4 amounted to 7% compared to 8% in Q4’21. This year over year decline was due to the appreciation of the US dollar. For the full year 2022, our operating margin amounted to 18% vs,” said the letter.
Netflix stock has jumped 4.1% postmarket following the earnings report, according to Seeking Alpha, where the company “easily cleared Street and management expectations for subscriber growth - and narrowly cleared the bar on its newfound top focus of revenue”


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