LIVE: Netflix reports Q1 earnings as streaming TV viewership surges
Netflixwill kick off media-earnings season today, when it reports after the bell its financial results for the first quarter of 2020.
- The streaming giant has been a bright spot in the
mediasector in recent weeks, as social-distancing practices threaten other media operations like theme parks, theatrical releases, and TVand film productions.
- Third-party data suggests Netflix's viewership was strong during the first quarter, as people spent more time at home.
- Netflix's report will show whether the apparent uptick in usage drove subscriber growth.
- Wall Street estimates that Netflix will blow past its target of 7 million paid subscribers additions for the quarter.
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Investors will get their first look on Tuesday into how social distancing has impacted Netflix's streaming business, when the company reports
Shares of Netflix are up 35% this year, in part because of the expectation that people are streaming more video as they spend more time at home. Netflix also landed hits like "Tiger King" and "Love Is Blind" during the quarter and released new seasons of fan favorites like "Narcos: Mexico," "Ozark," and "Elite."
Netflix has been a bright spot in the media sector in recent weeks, as social-distancing practices threaten other media operations like theme parks, theatrical releases, and TV and film productions.
Third-party data suggests Netflix's usage was strong during the first quarter, especially in the month of March, when many parts of the world went into lockdown:
- Visits to Netflix's US sign-up page surged year-over-year during March, showed data from SimilarWeb, which tracks activity in websites and mobile apps.
- Daily-active users on the Netflix mobile app spiked in March in places like Greece, Philippines, Italy, and India, and was fairly strong throughout the quarter across 30
marketswhere usage was tracked, SimilarWeb data also found.
- The pace of US churn, or subscription cancellations, at Netflix fell in both February and March, data from subscription measurement and analytics firm Antenna suggested.
Netflix's earnings announcement will show whether the apparent lift in usage drove subscriber growth, a key metric investors use to evaluate Netflix's performance.
Wall Street analysts estimate Netflix will blow past its subscriber-growth targets to add 8.47 million paid subscribers globally, about 1.1 million fewer subscribers than the company added a year ago, when it set an internal record.
Netflix forecasted it would add 7 million subscribers in the first quarter of 2020.
During the executive interview following Netflix's earnings announcement, CEO Reed Hastings is also expected to address how the streaming giant is responding to the global crisis.
Chief content officer Ted Sarandos told CNN on March 22 that viewing was rising on Netflix.
"We're proud to be part of that," Sarandos said, "which is trying to make that stay-home experience a little more bearable for folks, a little more enjoyable, even, and give some families something to gather around, something for people to talk about, making us feel a little less isolated while we are being physically isolated."
Here are the key numbers to watch from Netflix's Q1 earnings:
- Q1 revenue: Wall Street estimates $5.74 billion and Netflix forecasts $5.73 billion.
- Q1 earnings per share (GAAP): Wall Street estimates $1.64 and Netflix forecasts $1.66.
- Q1 global paid subscriber growth (paid net additions): Wall Street estimates 8.47 million and Netflix forecasts 7 million.
- Q2 revenue estimate: Wall Street estimates $5.96 billion.
- Q2 earnings per share (GAAP) estimate: Wall Street estimates $1.55.
For more about how the coronavirus pandemic is affecting media, see our coverage on BI Prime:
- How Netflix usage changed in 14 countries in March, according to exclusive app-tracking data: Traffic to Netflix's US registration website soared during the month of March, and Netflix app usage lifted in other parts of the world, data from analytics firm SimilarWeb suggests.
- Exclusive data suggests Netflix was hurt by the launch of Disney Plus, but has rebounded in recent weeks: The pace of Netflix's US churn, or cancellations, fell in both February and March, suggested data from subscription-measurement firm Antenna.
- The winners and losers among 11 Disney businesses, as analysts slash the projected value of the media giant's parks and raise expectations for Disney Plus: Wells Fargo analysts are valuing Disney's businesses at 26% less than they were before the coronavirus outbreak, according to a report.
- 40 advertising execs who manage $90 billion in spending describe how they're shifting their 2020 budgets in a new report. Here are 4 key takeaways for the TV industry: Connected-TV platforms like Roku and Hulu are expected to see the biggest gains in TV advertising, and Disney is the best-positioned cable-network group.
- The key factors analysts are watching at 5 major media companies including Disney and Fox to help determine whether their stock will keep falling or rebound: Combined, Disney, Fox, ViacomCBS, Discovery, and AMC Networks lost $92 billion in market value since the last market high on February 19, largely thanks to Disney.
- Disney has closed its US parks 'until further notice' and risks losing $1.5 billion in revenue per month they are shut, analysts say: Disney is extending "until further notice" its closures of its US theme parks, Disney World and Disneyland, because of the coronavirus pandemic, the company announced on March 27.
- Analysts lay out the financial damage each of Disney's businesses could face, as it closes parks 'until further notice' and delays films: Disney is one of the media companies most exposed the impact of the coronavirus because of its large theme-park and theatrical businesses.
- Why analysts say Disney and Discovery are the media giants most threatened by the coronavirus, but Comcast could fare better: Companies that generate significant shares of their revenue from theme parks, films, and advertising are most sensitive to the pandemic and the economic downturn it could ignite.
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