The 10-second takeaway
For the quarter ended March 31 (Q1), Netflix met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue grew significantly. Non-GAAP earnings per share expanded. GAAP earnings per share grew.
Margins grew across the board.
Netflix chalked up revenue of $1.02 billion. The 32 analysts polled by S&P Capital IQ looked for a top line of $1.02 billion on the same basis. GAAP reported sales were 18% higher than the prior-year quarter's $869.8 million.
Source: S&P Capital IQ. Quarterly periods. Dollar amounts in millions. Non-GAAP figures may vary to maintain comparability with estimates.
EPS came in at $0.31. The 28 earnings estimates compiled by S&P Capital IQ predicted $0.20 per share. Non-GAAP EPS were $0.31 for Q1 versus -$0.08 per share for the prior-year quarter. GAAP EPS were $0.05 for Q1 versus -$0.08 per share for the prior-year quarter.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 29.0%, 70 basis points better than the prior-year quarter. Operating margin was 3.1%, 330 basis points better than the prior-year quarter. Net margin was 0.3%, 80 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.06 billion. On the bottom line, the average EPS estimate is $0.34.
Next year's average estimate for revenue is $4.30 billion. The average EPS estimate is $1.28.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 7,745 members out of 9,678 rating the stock outperform, and 1,933 members rating it underperform. Among 2,887 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,629 give Netflix a green thumbs-up, and 258 give it a red thumbs-down.
Of Wall Street recommendations tracked by S&P Capital IQ, the average opinion on Netflix is hold, with an average price target of $135.84.
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Seth Jayson had no position in any company mentioned here at the time of publication. You can view his stock holdings here. He is co-advisor of Motley Fool Hidden Gems, which provides new small-cap ideas every month, backed by a real-money portfolio. The Motley Fool recommends Netflix. The Motley Fool owns shares of Netflix. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.