So, Netflix Inc. (NFLX) had a bit of a mixed bag last week. The streaming giant reported first-quarter numbers that beat expectations, but then it told investors the near future might look a little softer. At the same time, an analyst note highlighted something arguably more interesting than the quarterly numbers: Netflix is about to start looking a lot more like TikTok.
Let's break it down. The company reported Q1 revenue of $12.25 billion, beating analyst estimates of $12.18 billion. Earnings came in at $1.23 per share, which was way ahead of the 76 cents per share that analysts were looking for. That's the good news.
The not-quite-as-good news is the outlook. For the second quarter, Netflix is guiding for revenue of $12.57 billion, which is just shy of the $12.63 billion analysts were hoping for. It's expecting earnings of 78 cents per share, also below the estimated 84 cents. So, a beat on the past, a bit of a miss on the future. That's the financial snapshot.
There was also some corporate news. Chairman and co-founder Reed Hastings will not stand for re-election to the board when his term expires in June. Hastings stepped down as co-CEO back in 2023 and has been serving as chairman since. His departure means co-CEOs Ted Sarandos and Greg Peters are now fully, unequivocally in the driver's seat.
The Real Story: Netflix Wants You to Scroll
Okay, now for the fun part. According to a recent note from JPMorgan, Netflix is preparing to roll out a vertical video feed on mobile later this month. Think of it as a Netflix version of the endless, scrollable TikTok or Instagram Reels feed. The goal? To capture what the analysts call "snackable moments" and get users interacting with Netflix content outside of the traditional, sit-down TV experience.
Here's the thinking: despite being a massive global force, Netflix's primary focus has been on television viewing. Mobile engagement, by comparison, is relatively underdeveloped. The company accounts for about 5% of global TV view share, but there's a whole world of phone-scrolling time it hasn't really tapped into yet. This vertical feed is the key to that kingdom.
Targeting the Scroll Generation
JPMorgan expects this new product to feature clips from Netflix's original movies and series, alongside newer formats like video podcasts and creator-driven content. It's not just about showing you trailers; it's about using short, vertical clips to enhance content discovery and personalization. Imagine being able to clip a favorite scene from a show and having the app serve you more like it.
The strategy seems squarely aimed at younger audiences who are accustomed to this format. The analysts point out that social platforms already command about 18% of daily digital media time among U.S. adults—that's roughly 1.5 hours per day spent scrolling. Mobile video consumption is significant, but it still trails connected TV usage, suggesting there's room for Netflix to grow its slice of that pie.
More Than Just Engagement
This isn't just about keeping users busy. A successful vertical video feed could open up longer-term advertising opportunities. It could also boost awareness of Netflix's expanding universe, which now includes live events, sports, and games. It's a way to make the entire Netflix catalog feel more immediate and discoverable.
JPMorgan is bullish on the overall picture. The firm maintains an "Overweight" rating on Netflix with a $118 price forecast. They cite the company's formidable global scale—over 325 million subscribers—and continued growth in revenue and profitability, driven by an expanding content library and the momentum of its ad-supported tier.
As for the stock? Netflix shares were up 0.73% at $93.26 at the time of publication on Wednesday.
