Quarterly earnings results are a good time to check in on a company’s progress, especially compared to its peers in the same sector. Today we are looking at Netflix (NASDAQ: NFLX) and the best and worst performers in the consumer subscription industry.
Consumers today expect goods and services to be hyper-personalized and on demand. Whether it be what music they listen to, what movie they watch, or even finding a date, online consumer businesses are expected to delight their customers with simple user interfaces that magically fulfill demand. Subscription models have further increased usage and stickiness of many online consumer services.
The 8 consumer subscription stocks we track reported a mixed Q2. As a group, revenues beat analysts’ consensus estimates by 2.5% while next quarter’s revenue guidance was in line.
Thankfully, share prices of the companies have been resilient as they are up 7.6% on average since the latest earnings results.
Netflix (NASDAQ: NFLX)
Launched by Reed Hastings as a DVD mail rental company until its famous pivot to streaming in 2007, Netflix (NASDAQ: NFLX) is a pioneering streaming content platform.
Netflix reported revenues of $11.08 billion, up 15.9% year on year. This print was in line with analysts’ expectations, and overall, it was a satisfactory quarter for the company with EPS guidance for next quarter topping analysts’ expectations but number of global streaming paid memberships in line with analysts’ estimates.
Netflix delivered the weakest performance against analyst estimates of the whole group. The company reported 310.5 million users, up 11.8% year on year. Unsurprisingly, the stock is down 4.1% since reporting and currently trades at $1,224.
Is now the time to buy Netflix? Access our full analysis of the earnings results here, it’s free.
Best Q2: Roku (NASDAQ: ROKU)
With a name meaning six in Japanese because it was the founder's sixth company that he started, Roku (NASDAQ: ROKU) makes hardware players that offer access to various online streaming TV services.
Roku reported revenues of $1.11 billion, up 14.8% year on year, outperforming analysts’ expectations by 3.8%. The business had a very strong quarter with a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
The market seems happy with the results as the stock is up 8.1% since reporting. It currently trades at $101.89.
Is now the time to buy Roku? Access our full analysis of the earnings results here, it’s free.
Slowest Q2: Match Group (NASDAQ: MTCH)
Originally started as a dial-up service before widespread internet adoption, Match (NASDAQ: MTCH) was an early innovator in online dating and today has a portfolio of apps including Tinder, Hinge, Archer, and OkCupid.
Match Group reported revenues of $863.7 million, flat year on year, exceeding analysts’ expectations by 1.2%. Still, it was a softer quarter as it posted a decline in its users and a slight miss of analysts’ number of payers estimates.
Interestingly, the stock is up 14.2% since the results and currently trades at $38.52.
Read our full analysis of Match Group’s results here.
Coursera (NYSE: COUR)
Founded by two Stanford University computer science professors, Coursera (NYSE: COUR) is an online learning platform that offers courses, specializations, and degrees from top universities and organizations around the world.
Coursera reported revenues of $187.1 million, up 9.8% year on year. This print topped analysts’ expectations by 3.7%. It was a very strong quarter as it also produced EBITDA guidance for next quarter exceeding analysts’ expectations.
Coursera scored the highest full-year guidance raise among its peers. The company reported 183 million active customers, up 18% year on year. The stock is up 29.4% since reporting and currently trades at $11.75.
Read our full, actionable report on Coursera here, it’s free.
Duolingo (NASDAQ: DUOL)
Founded by a Carnegie Mellon computer science professor and his Ph.D. student, Duolingo (NASDAQ: DUOL) is a mobile app helping people learn new languages.
Duolingo reported revenues of $252.3 million, up 41.5% year on year. This result beat analysts’ expectations by 4.8%. Overall, it was a strong quarter as it also logged a solid beat of analysts’ EBITDA estimates and full-year EBITDA guidance exceeding analysts’ expectations.
Duolingo pulled off the biggest analyst estimates beat and fastest revenue growth among its peers. The company reported 128.3 million users, up 23.8% year on year. The stock is down 15.4% since reporting and currently trades at $291.25.
Read our full, actionable report on Duolingo here, it’s free.
Market Update
The Fed’s interest rate hikes throughout 2022 and 2023 have successfully cooled post-pandemic inflation, bringing it closer to the 2% target. Inflationary pressures have eased without tipping the economy into a recession, suggesting a soft landing. This stability, paired with recent rate cuts (0.5% in September 2024 and 0.25% in November 2024), fueled a strong year for the stock market in 2024. The markets surged further after Donald Trump’s presidential victory in November, with major indices reaching record highs in the days following the election. Still, questions remain about the direction of economic policy, as potential tariffs and corporate tax changes add uncertainty for 2025.
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