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Netflix Q4 Pre-ER: Ad Tier Growth in Focus for 2024
Over the last two years, Netflix has become a remarkable comeback story on the bottom line as the company improved its cash profile from negative (-$3.3 billion) in 2019 to a positive $1.6 billion in 2022. By raising free cash flow guidance every quarter this year, FCF for 2023 will now come in at $6.5 billion. Of the $6.5 billion, $1 billion is from the Writers and Actors Strike. When adjusting for this, FCF is at $5.5 billion, which more realistically sets expectations for 2024, when content spending will be higher than in 2023. The FCF guide is significantly higher than the initial $3 billion guide during Q4 2022 results. The growth in cash was central to our original entry and decision to build the position.
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