Netflix GAAP EPS of $0.12 misses by $0.38, revenue of $7.85B in-line

• Netflix press release (NASDAQ:NFLX): Q4 GAAP EPS of $0.12 misses by $0.38.
• Revenue of $7.85B (+1.8% Y/Y) in-line.
• ARM declined 2% year over year, but grew 5% on a F/X 3 neutral basis.
• Operating margin for Q4 amounted to 7% compared to 8% in Q4’21.
• Q1 2023 Outlook: Revenue growth of 4% (8% on a F/X neutral basis).
• We expect our F/X neutral revenue growth to be driven by a combination of year over year growth in average paid memberships and ARM.
• This translates into modest positive paid net adds in Q1 ‘23 (vs. paid net adds of -0.2M in Q1’22).
• Expect to roll out paid sharing more broadly later in Q1’23.
• Operating margin to be down year over year (20% vs. 25%) due primarily to the timing of content spend.
• 2023 Outlook: We continue to improve our service, grow our advertising business and launch paid sharing, we expect constant currency revenue growth to accelerate over the course of the year.
• Expect year over year operating profit growth and operating margin expansion for the full year.
• Operating margin of 19%-20% based on F/X rates at the beginning of 2022.
• Expect to deliver roughly 21%-22% operating margin on this basis (above the 19%-20% range).
• Rolling forward to F/X rates as of January 1, 2023, this translates into a FY23 operating margin target of 18%-20%.
• Shares +5.46%.