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Netflix (NFLX) is set to report first quarter earnings after the closing bell on Thursday. Yahoo Finance Senior Reporter Alexandra Canal sits down with Catalysts host Madison Mills and Great Hill Capital chairman and managing member Thomas Hayes to discuss what investors will be watching for during the streaming giant's results.
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Netflix is set to report its first quarter results on Thursday after the market close. Here's what to watch in the streaming juggernauts results, a senior reporter Alexandra Canal. Hey, Ally.
Hi, Maddie. Yeah, we have Netflix kicking off earning season for the media giants and all signs point to another solid report. As a reminder, the company will no longer disclose subscriber figures. In fact, this will be the first report that investors will not be receiving that metric, which means the focus this time around is going to be on revenue growth. And for the first quarter, we do have a double digit gain expected. Netflix guided to an 11% surge for top line sales. Average revenue per member, otherwise known as arm, that should also see a boost from recent price increases in the US, UK, and Canada, along with steady subscriber additions, although any commentary on churn from those price increases will be closely watched on the call. Now, all of that's to trickle through into further margin expansion, which the company is confident it can achieve. Currently, Netflix is projecting margins of 29% in 2025. That's up from last year's 27%. And finally, I want to quickly mention tariff impact, which is likely to affect the overall media business on the advertising side. According to an estimate from Moffatt Nathanson, tariffs could deliver a 45 billion dollar hit to companies like Meta, Snap, Roku, they all make the majority of their money through ads. So they're the ones that are going to be most exposed here, but we could potentially see that trickle through into the TV and streaming side more prominently the longer this goes on. It's also possible that production costs will rise and there could be retaliatory measures by other companies to limit the shows and movies foreign users can screen. So any further guidance or commentary on tariffs, what management is specifically watching out for, that's also going to be something to look out for in this report. And as we've been talking tariffs, he's also seen this dramatic decline of the US dollar and that could actually be a foreign exchange tailwind for Netflix this quarter and for the future. We've seen a strong dollar negatively impact earnings previously, so perhaps potentially one positive catalyst here from all of this. But again, Netflix reports earnings after the bell on Thursday. Certainly a lot to look out for.
