The 10-second takeaway
For the quarter ended June 30 (Q2), Netflix met expectations on revenues and beat expectations on earnings per share.
Compared to the prior-year quarter, revenue expanded significantly. GAAP earnings per share grew significantly.
Margins expanded across the board.
Netflix recorded revenue of $1.07 billion. The 31 analysts polled by S&P Capital IQ hoped for revenue of $1.07 billion on the same basis. GAAP reported sales were 20% higher than the prior-year quarter's $889.2 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 $0.49. The 23 earnings estimates compiled by S&P Capital IQ averaged $0.39 per share. GAAP EPS of $0.49 for Q2 were 345% higher than the prior-year quarter's $0.11 per share.
Source: S&P Capital IQ. Quarterly periods. Non-GAAP figures may vary to maintain comparability with estimates.
For the quarter, gross margin was 29.5%, 190 basis points better than the prior-year quarter. Operating margin was 5.3%, 350 basis points better than the prior-year quarter. Net margin was 2.8%, 210 basis points better than the prior-year quarter. (Margins calculated in GAAP terms.)
Next quarter's average estimate for revenue is $1.10 billion. On the bottom line, the average EPS estimate is $0.49.
Next year's average estimate for revenue is $4.34 billion. The average EPS estimate is $1.61.
The stock has a two-star rating (out of five) at Motley Fool CAPS, with 7,781 members out of 9,743 rating the stock outperform, and 1,962 members rating it underperform. Among 3,217 CAPS All-Star picks (recommendations by the highest-ranked CAPS members), 2,986 give Netflix a green thumbs-up, and 231 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 $200.01.
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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.