Netflix Set to Report Results, Including New Ad-Tier Service

Streaming giant Netflix will release its fourth quarter results after markets close today, and is expected to report its slowest revenue growth on record as its new ad-supported streaming tier struggles to gain traction.

The earnings won’t yet show the full impact of the new $6.99 subscription service, though Netflix has estimated it will have added 4.5 million subscribers in the last quarter of 2022. That would be the lowest addition for the holiday period since 2014. The company’s revenue is expected to have risen just 1.7% to $7.84 billion in the quarter, the lowest since it went public in 2002. Earnings per share (EPS) are estimated at 44 cents. 

Netflix's financial struggles underscore the company's difficulty navigating headwinds including fierce competition from Apple Inc.'s Apple TV+, Walt Disney Co.'s Disney+, Amazon.com Inc.'s Amazon Prime Video, and other streaming services; dampened customer spending in a period of inflation; and mounting production costs. Netflix expects to spend roughly $17 billion annually over the next few years to develop content.

Netflix will give guidance on revenue and earnings, but it's planning to stop reporting on subscriber growth starting this quarter, which could lead to more volatility in its stock price.

Shares of Netflix (NFLX) have climbed 10% so far this year, and are up about 70% over the past six months.