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Netflix Q1 Pre-Earnings: Looking to ARM and Net Additions
Netflix returned to double-digit growth in Q4, and guided to 13.2% YoY revenue growth, the fastest growth rate since Q4 2021. We noted in Q4’s post-earnings report that average revenue per member (ARM) would be one of the more important metrics to watch this quarter, after Netflix raised prices for the first time in 18 months last October. Commentary from management implied we would see ARM return to growth in 2024 after being flat to negative throughout 2023. Netflix has not updated its ad tier subscribers since January, so an update may be in store. Notably, Netflix has gone through a phenomenal turnaround on the bottom line and this was the primary reason we added the stock to our portfolio about 18 months ago. We detail this and more below.
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