Revenue Analysis
Total and Operating Revenue: NFLX has shown a varying trend in Operating Revenue over the reporting periods. In Q1 2024, there is a rise to $9.37 billion, compared to $8.83 billion in Q4 2023 and $8.54 billion in Q3 2023. The consistent Operating Revenue indicates a stable market presence.
Gross Profit Margin: The Gross Profit has also increased in Q1 2024 to approximately $4.39 billion. This is a significant rise from $3.53 billion in Q4 2023 and $3.61 billion in Q3 2023, indicating improved efficiency or pricing strategies.
Cost Management
Cost of Revenue: There was a noticeable increase in the Cost of Revenue, reaching $4.98 billion in Q1 2024. This is an increase from $5.31 billion in Q4 2023 but seen as a gradual increment from earlier quarters of 2023.
Operating Expense: Operating Expense in Q1 2024 was $1.76 billion, showing reductions from previous quarters which were relatively higher, demonstrating better cost management.
Total Expenses: Total Expenses showed a significant rise in Q1 2024 at approximately $6.74 billion compared to $7.34 billion in Q4 2023, indicating efficient expense management techniques applied by the company.
Profitability Analysis
EBITDA: NFLX’s EBITDA markedly increased to $6.55 billion in Q1 2024 from $5.21 billion in Q4 2023, showing strong profitability growth.
Operating Income: Operating Income rose to $2.63 billion in Q1 2024 from $1.50 billion in Q4 2023, demonstrating substantial operational efficiency gains.
Pretax Income: Pretax Income has observed an increase up to $2.61 billion in Q1 2024 from $1.15 billion in Q4 2023, contributing to a solid profitability outlook.
Net Income: Net Income more than doubled from $937.84 million in Q4 2023 to approximately $2.33 billion in Q1 2024, reflecting strong overall financial health.
Cash Flow Indicators
Reconciled Depreciation: This cost has slightly shifted downwards in Q1 2024 to $3.76 billion from $3.84 billion in Q4 2023, suggesting minor adjustments in asset depreciation.
Interest Expense: Interest Expenses stand at $173.31 million in Q1 2024, marking a decline from previous quarters which is beneficial from a cash flow perspective.
Taxation
Tax Rate for Calculations: The tax rate increased to 0.11 in Q1 2024 from a previous rate reported in Q4 2023 at approximately 0.18, indicating fluctuations in tax obligations.
Tax Provision: Tax provisions increased to $282.37 million in Q1 2024 from $210.31 million in Q4 2023, aligning with the increased earnings.
Tax Effect of Unusual Items: There was no reported tax effect of unusual items in any quarter, signifying no exceptional tax-related activities.
Shareholder Metrics
Diluted and Basic EPS: Earnings per share improved significantly, with Diluted EPS at 5.28 and Basic EPS at 5.4 in Q1 2024, which are enhancements over previous quarters.
Average Shares: The Diluted Average Shares slightly decreased to 441.65 million in Q1 2024 from 444.29 million in Q4 2023, reducing share dilution.
Net Income Available to Common Stockholders: Mirrors the net income at about $2.33 billion in Q1 2024, marking significant shareholder value addition.
Conclusion
NFLX has shown exemplary performance improvement in Q1 2024 across revenue, profitability, and shareholder metrics, reflecting strong operational control and market efficiency. The company has successfully managed costs and enhanced profitability, which together contribute to the positive outlook. Continued focus on innovation and market expansion, coupled with stringent cost control measures, are recommended to sustain and further this growth trajectory.