Have you evaluated the performance of Netflix's (NFLX Quick QuoteNFLX - Free Report) international operations for the quarter ending September 2024? Given the extensive global presence of this internet video service, analyzing the patterns in international revenues is crucial for understanding its financial strength and potential for growth.

In the current global economy, which is more interconnected than ever, a company's success in penetrating international markets is crucial for its financial health and growth journey. Investors must understand a company's dependence on overseas markets, as this offers a window into the company's earnings stability, its ability to benefit from varied economic cycles and its potential for long-term growth.

Presence in international markets can act as a hedge against domestic economic downturns and provide access to faster-growing economies. However, this diversification also brings complexities due to currency fluctuations, geopolitical risks and differing market dynamics.

While analyzing NFLX's performance for the last quarter, we found some intriguing trends in revenues from its overseas segments that Wall Street analysts commonly model and monitor.

The recent quarter saw the company's total revenue reaching $9.82 billion, marking an improvement of 15% from the prior-year quarter. Next, we'll examine the breakdown of NFLX's revenue from abroad to comprehend the significance of its international presence.

Unveiling Trends in NFLX's International Revenues

Of the total revenue, $3.13 billion came from Europe, Middle East and Africa during the last fiscal quarter, accounting for 31.9%. This represented a surprise of +0.06% as analysts had expected the region to contribute $3.13 billion to the total revenue. In comparison, the region contributed $3.01 billion, or 31.5%, and $2.69 billion, or 31.5%, to total revenue in the previous and year-ago quarters, respectively.

During the quarter, Asia-Pacific contributed $1.13 billion in revenue, making up 11.5% of the total revenue. When compared to the consensus estimate of $1.09 billion, this meant a surprise of +3.44%. Looking back, Asia-Pacific contributed $1.05 billion, or 11%, in the previous quarter, and $948.22 million, or 11.1%, in the same quarter of the previous year.

Latin America generated $1.24 billion in revenues for the company in the last quarter, constituting 12.6% of the total. This represented a surprise of +0.93% compared to the $1.23 billion projected by Wall Street analysts. Comparatively, in the previous quarter, Latin America accounted for $1.2 billion (12.6%), and in the year-ago quarter, it contributed $1.14 billion (13.4%) to the total revenue.

International Market Revenue Projections

Wall Street analysts expect Netflix to report $10.16 billion in total revenue for the current fiscal quarter, indicating an increase of 15% from the year-ago quarter. Europe, Middle East and Africa, Asia-Pacific and Latin America are expected to contribute 31.5% ($3.2 billion), 11% ($1.12 billion) and 12.2% ($1.24 billion) to the total revenue, respectively.

For the entire year, the company's total revenue is forecasted to be $38.89 billion, which is an improvement of 15.3% from the previous year. The revenue contributions from different regions are expected as follows: Europe, Middle East and Africa will contribute 31.6% ($12.3 billion), Asia-Pacific 11% ($4.29 billion) and Latin America 12.4% ($4.84 billion) to the total revenue.

Final Thoughts

The dependency of Netflix on global markets for its revenues presents a mix of potential gains and hazards. Thus, monitoring the trends in its overseas revenues can be a key indicator for predicting the firm's future performance.

In an environment where global interconnections and geopolitical skirmishes are intensifying, Wall Street analysts keep a keen eye on these trends, particularly for firms with overseas operations, to adjust their earnings predictions. Moreover, a range of other aspects, including how a company fares in its home country, significantly affects these projections.

At Zacks, a company's changing earnings outlook is given considerable attention due to its proven, strong influence on a stock's price performance in the near term. The connection here is straightforward and positive: when earnings estimates are revised upward, the stock price generally follows suit, increasing as well.

Boasting a remarkable track record that's been externally verified, the Zacks Rank, our unique stock rating system, leverages changes in earnings projections to function as a reliable gauge for predicting short-term stock price movements.

Netflix currently has a Zacks Rank #2 (Buy), indicating that it could outperform the broader market in the near term. You can see the complete list of today's Zacks Rank #1 (Strong Buy) stocks here >>>>

Netflix's Recent Stock Market Performance

The stock has increased by 9% over the past month compared to the 4.5% rise of the Zacks S&P 500 composite. Meanwhile, the Zacks Consumer Discretionary sector, which includes Netflix, has increased 8% during this time frame. Over the past three months, the company's shares have experienced a gain of 21% relative to the S&P 500's 6.1% increase. Throughout this period, the sector overall has witnessed a 10.6% increase.