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Netflix (NFLX) expects strengthening US dollar to negatively impact 2022 full-year revenue

Over the medium term, Netflix believes it can adjust its pricing and cost structure 'for a stronger US dollar.'

Morgan Shaver

October 18, 2022 1:50 PM

Netflix

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Netflix (NFLX) shared its Q3 2022 earnings report today and in it was a wealth of information regarding revenue and EPS expectations. Aside from these details, Netflix also delved deeper into relevant subjects in its earnings report such as the impact the strengthening US dollar will have on its full-year revenue for 2022.

In the earnings report, it’s noted that the company’s four percentage point year-over-year decline in its operating margin is “almost entirely due to the appreciation in the US dollar vs. most other currencies during this period.” The report then goes on to touch on how the appreciation of the US dollar continues to be a headwind for Netflix with an expected revenue of $7.8 billion projected for Q4 2022.

Given the rate at which the US dollar has strengthened, the company estimates the appreciation seen since January 1 will negatively impact its full-year 2022 revenue and operating income.

Other aspects noted include Netflix’s reported operating margin being lower than 19 to 20 percent “should the US dollar remain above January 2022 levels relative to other currencies.” The company says that over the medium term, it believes it can adjust its “pricing and cost structure for a stronger US dollar.”

Lastly, Netflix continues to expect “FCF of +$1 billion for the full year 2022, plus or minus a few hundred million dollars and substantial growth in FCF in 2023 (assuming no further material appreciation of the US dollar).”

For more on the impact of the strengthening US dollar on Netflix’s Q3 2022 earnings report, be sure to read through the full report. And for more on Netflix’s Q3 2022 earnings, check out some of our previous coverage including Netflix (NFLX) saying the strength of the US dollar is partially to blame for slowing sales growth, and how Netflix’s (NFLX) Q3 2022 earnings results beat revenue and EPS expectations.

Morgan Shaver

Senior Editor

Morgan is a writer from the frozen wastelands of Maine who enjoys metal music, kpop, horror, and indie games. They're also a Tetris fanatic who's fiercely competitive in games like Tetris 99... and all games in general. But mostly Tetris. You can follow Morgan on Twitter @Author_MShaver.