Netflix(US:NFLX)2024-07-22 04:01Investment Rating - The report maintains a positive outlook on the company, indicating a strong performance in the streaming market and an upward revision of revenue growth guidance for 2024 to 14-15% [1][2]. Core Insights - The company reported a net addition of 8.05 million members in Q2 2024, exceeding market expectations by 69%, driven by strong content performance and the impact of paid sharing accounts [1][2]. - The management has raised the operating profit margin guidance for 2024 to 26%, reflecting ongoing efficiency improvements [1][2]. - The advertising segment is expected to become a significant growth driver starting in 2026, with a notable increase in ad-supported membership [2]. Summary by Sections Q2 Performance - Total revenue reached $9.56 billion, a year-on-year increase of 17% (22% on a currency-neutral basis), surpassing the company's guidance and market expectations of 16% [1][2]. - Operating profit was $2.6 billion, up 42% year-on-year, with an operating margin of 27.2%, an increase of 5 percentage points [1][2]. - Net profit stood at $2.1 billion, reflecting a 44% year-on-year growth, with a net profit margin of 22.5% [1][2]. Membership Growth - The company saw a net increase of 8.05 million members, significantly higher than the market expectation of 4.77 million [1][2]. - The Asia-Pacific region contributed the most to membership growth, with a net addition of 2.83 million members, highlighting the importance of localized content [1][2]. Advertising and Content Investment - The number of ad-supported members increased by 34% in Q2, with penetration rates rising to 45% in markets where the ad package has been launched [2]. - Content cash spending for Q2 was $4.4 billion, a year-on-year increase of 21%, with total content investment guidance for 2024 maintained at $17 billion [2]. Future Guidance - For Q3 2024, the company expects a revenue growth of 14% year-on-year and an operating profit of $2.7 billion [2]. - The full-year guidance for revenue growth has been revised to 14-15%, with an operating profit margin target of 26% [2].