NFLX – Daily Chart
The price of NFLX has fallen over the last few days and is testing a big support level which was the resistance from the 2021 high. This is the key level to watch around the earnings release.
Netflix continues to be the dominant streaming platform and the company will release its third quarter earnings on Thursday. Subscriber gains are expected to slow down and some analysts are predicting a price hike from the company with a growing trend toward advertising revenue.
In its last two quarterly earnings reports, Netflix has warned of a potential dip in subscribers as benefits from its password-sharing crackdown are starting to wane. The net increase in Netflix’s paid memberships for the third quarter is expected to be around 3.5 million, marking a sharp decline from 8.8 million seen at the same time last year, according to estimates from FactSet.
The company has also said that it will start to stop subscriber statistics completely in 2025, signalling a shift in focus from subscriber growth to profit. For its users, this could mean more price increases, more ads, and more live event programming, according to analysts.
“Investors are likely to need to see evidence of pricing leverage in 2025 to make up for slowing account growth,” wrote Raymond James analyst Andrew Marok.
He also said that the company will not need to show specific plans for a price hike this quarter, but investors will want to see progress by early next year. The last time the company raised its subscriber prices was in October 2023.
The company first debuted an ad-supported subscription plan in 2022, and Wedbush analysts said the company’s advertising efforts could become a primary growth driver in 2026.
“The most significant benefit of the ad tier so far is that it limits churn. We think Netflix is positioned to accelerate ad tier revenue contribution into year-end and 2025 as it improves its advertising solutions and targeting, utilises new partnerships, and adds more live events,” they wrote on Monday.
The company is also focused more on live event programs and one way Netflix is courting advertisers is via more live event programming with American football games and boxing.