Netflix and Meta (Facebook) stocks: quarterly performance

This article will analyze the quarterly performance of Netflix and Facebook stocks.

Q3 of 2022 of Netflix and Meta (Facebook) stocks

Netflix stock

Netflix‘s Q3 wakes up analysts from a fearful sentiment and brings back optimism among insiders, the much-feared inflation that has reinvigorated the dollar seemed to deliver a jump account in this quarterly, instead, it did not.

Shares of entertainment giant Netflix Inc. (NLFX) soared more than 14% during after-hours trading following the very release of quarterly figures that against all expectations were excellent to the point that the film and series company’s was looking like a legitimate case study.

Estimates of profits, revenues, and even the number of subscriptions far exceeded the expected figures for this Q3.

The super dollar remains a problem to deal with and makes the market volatile as well as negatively affecting revenues for the company.

The quarter recorded an increase of two million less than the same period last year but a net recovery from last quarter with as many as 2.4 million paying subscribers and the gap according to the company will be 50% recovered in Q4 for which 4.5 million new subscriptions are expected.

Last year’s Q4 paying subscribers were 8.3 million versus the 4.5 million expected this year.

As for the recent advertising plan (ADV) put in place the company spoke in a comment:

Netflix stated:

“While we are very optimistic about our new advertising business, we do not expect a substantial contribution in the fourth quarter of 22, as we are launching our Basic with Ads plan within the quarter and plan to grow our membership of this plan gradually. over time. While we are very optimistic about our new advertising business, we do not expect a substantial contribution in the fourth quarter of 22, as we are launching our Basic with Ads plan within the quarter and plan to grow our adherence to this. gradually over time.”

Profit and Revenue of Netflix Inc. (NFLX)

Netflix Inc’s profit came in at $3.10, a gap of $0.92 above analysts’ estimates of $2.18.

Meanwhile, revenue in this Q3 hit $7.93 billion compared to expectations that were $7.85 billion, recording a year-on-year increase of 6% total.

The U.S. company’s operating margin was expected to touch 16% while confirming the euphoria for the remainder of the data the figure was 19.3% benefiting from higher revenue and timing.

Sophie Lund-Yates, Lead Equity Analyst at Hargreaves Lansdown, said:

“Netflix’s surprise subscription growth has truly stolen the show. Markets were braced for a far more measly set of results, but strong content from the likes of The Jeffrey Dahmer Story and latest instalment of Stranger Things appears to have convinced people to stick with the platform, and enticed newbies into the fold. Netflix was also keen to point out one of its core strengths – its maturity. This means that it’s successfully generating profits, which its younger rivals can’t boast. That’s something that shouldn’t be overlooked, but it’s also not enough to warrant a mic drop from the original streaming provider.

Being the biggest has been enough for Netflix to get by, but that’s no longer the case. While recent growth has been impressive, it still faces a balancing act of attracting new subscribers in the face of fierce competition all while trying to maintain discipline with its spending. The introduction of an ad-tiered system in early November is an attempt to make the service more attractive to a consumer-base which is tightening its purse strings. The total number of British homes with at least one streaming subscription fell by almost 1m from January to September, in a stark reminder of the changing consumer tide.

Netflix’s challenge is that its competitive edge is becoming dulled. Rivals are closing the gap on content quality. The payment reductions offered for the ad-supported version arguably don’t represent good market value either when compared to rival offerings, especially the Disney+ and Hulu bundle. The business risks seeing its more lucrative customers, who pay for higher resolutions and offline streaming, slide down into a cheaper plan. That means Netflix risks sacrificing margin in the name of stopping subscriber outflows, rather than replenishing the top of the funnel with new ones.

All told, Netflix has shifted the spotlight to a more flattering hue, but there are some sizeable competitive challenges waiting in the wings.”

Meta (Facebook) stock

Shares of the blue social network lost some ground in anticipation of the quarterly reports due on 26 and 27 October 2022 settling at $132.80 with a meager -0.93%.

Meta is pushing on the privacy issue and in order for its shares to regain ground on Wall Street, it is using MPC’s services to create appeal among users who increasingly seek security. 

The company’s shares in the past six months have dropped as much as $15 in value, and the difference with one-year stocks is even more merciless, showing a loss of 63%.

Analysts agree on a physiological recovery that will take place next year for the stock that with a bear market on the wane and the gradual improvement of the blue metaverse will be able to bring Meta (Facebook) back to its former glory also and especially in terms of earnings, stock value and registered users. 

The MPC Alliance, which is a nonprofit organization with the aim of increasing awareness and greater privacy with the help of cryptographic technology, boasts dozens of companies among its ranks including Bosch (59 the total number of member companies) and nearly three dozen other companies have recently joined.

Frank Wiener, President of MPC Alliance and Marketing Director at Blockdaemon, said:

“Multi-party computing or MPC has unquestionably emerged as a critical and reliable data security technology in recent years, and the adoption of the technology is rapidly expanding into a wide variety of data privacy applications. We are adding more new members each. month, which gives us more resources to take new initiatives. The membership of major institutions such as Meta in the organization strengthens the alliance and provides even greater market validation.”

Sanjay Saravanan, who leads the applied cryptography research group at Meta, commented:

“Last year, we shared our long-term vision on technologies that enhance privacy and how we believe they will become fundamental to the future of personalized advertising experiences. MPC is a key part of this technology stack and we believe that the collaboration of the industry is essential to the development of interoperable solutions and a shared set of standards to support a free and open Internet. The MPC alliance is already an industry leader in increasing understanding and adoption of MPC for various applications and we are proud to be part of the effort.”

The MPC Data Privacy Summit allowed all member companies including Facebook (Meta), technologists, academic and commercial organizations, regulators and legal experts to work together on improving MPC and ways to improve privacy.

Technology is proven to often come to the rescue of real problems and MPC is to date the most popular technology used by crypto native service providers and also by traditional financial service providers, Google, Meta, Partisia and the European Commission themselves use it for example.