Netflix Q4 2021 Earnings report

Netflix has reported its Q4 2021 results, which include predictions of slower growth in the future.
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Netflix reported its 2021 quarter-four earnings report on Thursday. Overall the company beat most expectations for Q4 2021, however, the company has predicted significantly slower growth going into the future than what was expected. As a result of this Netflix, the stock has dropped around 20%.

In the opening statement of Netflix’s shareholder letter, the company said the following:

“We achieved several milestones in 2021: we had the biggest TV show of the year (Squid Game), our two biggest film releases of all time (Red Notice and Don’t Look Up) and Netflix was the most Emmy-winning and most nominated TV network and the most Oscar-winning and nominated movie studio of 2021.”

The company also said:

“Even in a world of uncertainty and increasing competition, we’re optimistic about our long-term growth prospects as streaming supplants linear entertainment around the world. We’re continually improving Netflix so that we can please our members, grow our share of leisure time and lead in this transition.”

Some of the key information from Netflix’s Q4 2021 results includes:

  • Revenue of $7.7 billion, up 16% year over year.
  • Operating Income of $632 million with an operating margin of 8.2%.
  • Net Income of $607 million.
  • Diluted EPS of $1.33 million.

In terms of membership numbers, the company reported the following:

Global Streaming Paid Memberships: 221.84 million, up 8.9% year over year. Global Streaming Paid Net Additions: 8.28 million. In terms of membership, it appears for Netflix growth in this area is slowing. Despite the company adding an additional 8.28 million global paid net subscribers in quarter four, which is above the predicted 8.19 million, it is overall much fewer subscribers than Netflix has gained in previous quarters.

Netflix has forecast paid net additions for Q1 2022 to be 2.5 million, however, analysts forecast a much higher number of 5.9 million.

As a result of the slowing growth of subscriber numbers, Netflix stock dropped around 20% in after-hours trading.

Alongside movies and shows, Netflix has also begun offering its game service, focusing on mobile games. It is yet to be seen how this will work out for Netflix as the offering is still in an early phase.

In 2021, Netflix accounted for six out of the ten most searched for shows globally, these include: Squid Game, Bridgerton, Cobra Kai, Sweet Tooth, Lupin, Ginny and Georgia. Two of the ten most searched shows belonged to Netflix, those were: Red Notice and Army of the Dead.

Netflix has also confirmed its most popular show ‘Squid Game’ will be returning for a second season.

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