Netflix to Report 3Q Results with Layoffs, Engagement in Focus

Dow Jones
4 hours ago
 
 

Netflix is set to report its third-quarter earnings after the market closes on Tuesday. Here's what you need to know.

 

NET INCOME: The streamer is expected to report a profit of $3.46 billion, up from $2.55 billion in the same quarter a year earlier, according to analysts polled by FactSet.

REVENUE: Analysts expect revenue to grow to $12.87 billion from $11.51 billion a year earlier.

Netflix's shares have fallen 26% this year and were recently trading down 1.4%, at $69.57.

 

WHAT TO WATCH:

--The earnings release will follow a few major shake-ups at Netflix. Last week, the company said it would lay off around 6% of its staff, mostly in tech, product, legal, and human-resources teams, in its biggest round of layoffs since 2022. A day later, the company parted ways with Bela Bajaria, its chief content officer, bringing in former Disney executive Peter Rice to oversee its content offerings. "Netflix is actively working to change the situation, as it has done before when the environment became challenging," Wedbush analysts wrote in a recent note.

--The big moves may be necessary to set Netflix back on a stronger trajectory, as flagging engagement and growth numbers have caused investors to take a cautious view of the stock. Third-party data suggests continued share loss to Google's YouTube since the second-quarter print, indicating a weaker setup this time around, according to StoneX analyst Daniel Kurnos. Morgan Stanley analysts wrote that "while once the disrupter, challenger and share taker, NFLX now finds itself on the other side of the chasm and seemingly has to fight harder to remain relevant."

--Bright spots in Netflix's print are likely to include the company's advertising business, which analysts believe still has a substantial growth runway, as well as its nascent expansion into India. Netflix is also likely to highlight its content slate, both its recent licensing deal with Disney and its upcoming live events in the fourth quarter, which includes the first-ever Thanksgiving Eve NFL game between the Green Bay Packers and the Los Angeles Rams.

 
 

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