Netflix Earnings Preview: The Last Hurrah for Disclosing Subscriber Growth Numbers

The stage is set for global streaming giant Netflix to disclose its fourth-quarter and full-year 2024 results, including what is expected to be its final period of quarterly subscriber disclosures. After all, the company said last year that it is more focused on other performance metrics.

Led by co-CEOs Ted Sarandos and Greg Peters and executive chairman Reed Hastings, Netflix had ended September with 282.72 million global subscribers, with Wall Street experts estimating that it finished the year above the 290 million mark, helped by season 2 of Korean hit drama Squid Game and those Christmas NFL games. 

Despite a recent drop in Netflix shares, which has left it down 5 percent so far this year as of Thursday’s stock market close, after a strong run-up last year, various experts continue to recommend the stock, some even as a top pick for 2025, and several analysts have further raised their price targets heading into the latest earnings report.

Nielsen’s latest Media Distributor Gauge, for November, shows Netflix at 7.7% of TV use.

Here is a look at what some Wall Street observers have forecast and highlighted in their earnings previews.

Guggenheim Securities analyst Michael Morris maintained his “buy” rating on the stock and boosted his price target from $825 to $950 in his earnings note. “Netflix remains the undisputed streaming leader, and we continue to see that leadership position driving sustained, long-term shareholder returns,” he wrote. “However, shares are off 10 percent from their early December highs, compared to a 4 percent decline for the S&P 500, we believe due to 1) a demanding valuation, 2) a view that it is too early to see upside to 2025 guidance provided with third-quarter earnings, and 3) foreign-exchange headwinds driven by a stronger U.S. dollar in the fourth quarter.”

Expectations are that the streamer will “sunset regular member count disclosure on a high note on the back of big engagement for key live and franchise content,” Morris continued, citing Guggenheim colleague Seth Ostrie’s buy-side survey that shows a majority of investors predicting more than 11.1 million user net additions in the later quarter and 29 percent even forecasting more than 13.1 million. As a result, “we raise our estimate to 10.5 million versus our prior 9.5 million and sell-side consensus 9.1 million,” the analyst noted.

Like other experts, he warned of the financial impact of a strong dollar on Netflix’s latest results and in the near future, citing “foreign exchange-driven downward revisions to our 2025 estimates.”

Nonetheless, “we expect core revenue growth approaching 14 percent and long-term model upside fueled by global member growth runway, subscription pricing power, ad-revenue expansion, including a strong tailwind from expanded ad-supported content delivered to premium subscribers, and the company’s unique multi-market content sourcing strategy – a natural, albeit partial near-term, strategic currency hedge in a strong dollar environment,” Morris concluded.

Evercore ISI analyst Mark Mahaney, who has an “outperform” rating and $950 price target on Netflix’s stock, also highlighted the impact of the strong dollar in his preview entitled “Will Squid Game II and NFL Christmas Be Enough?”

He called Wall Street estimates of around 9.0 million global subscriber additions “appropriate, if not conservative, given a very strong fourth-quarter content slate (Squid Game season 2 on Dec. 26) and tailwinds from fourth-quarter live events (e.g., Paul v. Tyson, NFL Christmas Day games).”

First-quarter revenue estimates may have to come down though “given recent U.S. dollar strength,” Mahaney highlighted. “As for the full year 2025, we would expect Netflix to modestly lower its current guidance of 11-13 percent reported revenue growth with (a) 28 percent operating margin to more like 10-12 percent and 27 percent, all due to foreign exchange.” He mentioned “hedging and potential targeted price increases in high-inflation markets” as tools that Netflix could use to limit the impact.

Meanwhile, Wolfe Research analyst Peter Supino addressed how that currency headwind could affect the stock and investors’ take on it. “Will the U.S. dollar spoil the Netflix near-term bull case?” he wondered. “Though investors expect near-record fourth-quarter net adds and content momentum into ’25, … financial estimates will be increasingly critical” as the streamer ends sharing subscriber data.

“Conservative ’25 guidance may be overshadowed by the U.S. dollar rising 8 percent in the fourth quarter which we estimate leads to a mid-single-digit percentage cut to ’25 operating income estimates,” argued Supino before warning. “When combined with elevated fourth-quarter average revenue per user (ARPU) thanks to the NFL games and Paul/Tyson fight advertising and lack of announced price increases, average revenue per member (ARM) looks at risk of dropping sequentially which coincides uncomfortably with no disclosure on net adds as paid sharing tailwinds fade, creating a risky near-term setup.”

Supino has a “peer perform” rating with no price target on Netflix shares, explaining: “At today’s valuation, Netflix needs to show a virtuous cycle of content, engagement, subs and pricing with double-digit growth sustained for many years in a competitive industry structure for shares to outperform.”

In comparison, TD Cowen analyst John Blackledge is more bullish, forecasting paid net adds of 9.42 million in the fourth quarter “reflecting seasonal strength and a strong slate of fourth-quarter originals.” He maintained his “buy” rating on the stock but boosted his price target from $835 to $1,000.

“Our latest annual ad buyer survey suggests significant ad opportunity for Netflix, while our consumer survey shows Netflix remains the top choice for living room viewing,” he wrote in outlining his bullishness.

Plus, there are pricing levers for the company. “Management phased out the basic tier in Brazil in the fourth quarter following earlier phaseouts in the U.S., France, U.K. and Canada,” Morris explained. “We expect them to eventually do the same in other markets and view this as a positive driver for AVOD member growth.”

With the streamer recently mentioning 70.0 million monthly active users on its ad tier, he forecast the company would end 2025 with 45.0 million global paid members on its ad tier (a figure that is lower due to multiple users per account), with that rising to 76.2 million by 2029.

Macquarie analyst Tim Nollen argued that with the end of subscriber disclosures, investors will pay closer attention to these ad tier trends. “Netflix will provide sub figures for the last time. We expect a strong quarter, including major content events,” he wrote about the fourth quarter. “The focus now shifts to better monetizing the ad tier, with likely live sports expansion and price increases boosting revenue and earnings.”

Reiterating his “outperform” rating and lifting his stock price target from $795 to $965 amid increased financial projections, Nollen estimated an ad revenue contribution of $2 billion in 2025, $3 billion in 2026, and $4.5 billion in 2027 “when Netflix’s efforts to boost ad tech engagements with The Trade Desk and Magnite hit their stride.” But that is not all. “We expect a further boost from a 10-15 percent price increase to the U.S. standard plan, adding some $600 million annualized to the top line,” the Macquarie expert noted.

Despite an end to Netflix’s user disclosures, “we expect live events to become a big driver of sub addition and retention, with concurrent costs,” the analyst added. “Netflix has a global scale advantage that can help it appeal to major sports leagues over time – the WWE contract began this week, Netflix has the next two Women’s (soccer) World Cups, and MLB and NFL rights may be available as early as 2029 and 2030,” Nollen concluded. “We estimate Netflix made money on the NFL Christmas games and are optimistic that while content costs will rise, it will still push through (a) 30 percent operating margin in 2027.”

Wedbush analyst Michael Pachter also remains a Netflix bull. “We believe Netflix will continue to expand profitability and generate increasing free cash flow, supporting our ‘outperform’ rating” with a $950 stock price target, he wrote in his earnings preview.

“Netflix has established a virtually insurmountable lead in the streaming wars,” he argued. “Netflix can retain its moat while competitors try to replicate its business model. Even as Netflix has lapped the password-sharing crackdown, we expect its advertising tier to drive revenue growth for several years. So far, the introduction of the ad tier has limited churn, lowering pressure on adding new subscribers, with at least 30 million accounts converting to the ad tier in the past six months. We think Netflix is positioned to accelerate ad tier revenue contribution for the next several years as it adds more live events, improves its advertising solutions and targeting, and utilizes new partnerships.”

Pachter also shared his subscriber estimates for the final quarter of 2024, predicting 10.0 million net subscriber additions globally, which he said compared to the Wall Street consensus of 9.2 million.

BMO Equity Research analyst Brian Pitz expressed similar confidence in a report, entitled “Localization and ‘Shoulder Content’ to Grow Engagement/Unlock AVOD Monetization,” that saw him boost his Netflix price target from $825 to $1,000 while sticking to his “outperform” rating.

“AVOD monetization is gaining traction among brand advertisers,” he wrote. “We raise our estimated end-2025 AVOD users to 90 million from 60 million following successful live events in the fourth quarter and the beginning of WWE in the first quarter, with upside potential from Women’s World Cup soccer in 2027 and unannounced content.”

He also sees continued momentum in terms of audience and engagement, arguing that Netflix’s “content initiatives are producing massive viewership,” with Squid Game season 2 and WWE programming being among the examples he cited.

Finally, “pricing remains an optionality for both standard and premium tiers,” Pitz emphasized. “Netflix Standard and YouTube Premium pricing have been largely in line for nearly 10 years, while YouTube TV and Netflix Premium remain two to seven times below cable TV pricing.”

Finally, Bank of America analyst Jessica Reif Ehrlich in her 2025 preview at the end of 2024 also highlighted her bullishness on Netflix, on whose stock she has a “buy” rating with a $1,000 price target. “Supported by its world-class brand, leading global subscriber base, and position as a leading innovator we believe Netflix is poised to continue to outperform,” she concluded, calling the streasmer “one of our top picks for the year ahead.” 

She highlighted such catalysts as continued subscriber growth, an “accelerating ramp of the burgeoning ad business, which is expected to double in ’25 (albeit off a small base) and become a multi-year growth driver in ’26 and beyond,” growth of live programming “which benefits subscriber acquisition (Tyson/Paul fight had 1.43 million subscriber additions in the U.S., according to Antenna) as well as grow the advertising business by providing premium inventory,”  as well as “potential growth in gaming.”