Throughout the 2024 Q4 earnings cycle, we’ve seen several notable companies, including Meta Platforms META and Netflix NFLX post results that saw a boost from advertising results.

Both stocks have been red-hot over the past year on the back of strong quarterly results, with the current EPS outlooks alluding to further gains. Let’s take a closer look at the strong results from each.

Meta’s Advertising Efforts Pay Off

Concerning headline figures in its release, Meta Platforms posted adjusted EPS of $8.02 and record sales of $48.4 billion, reflecting growth rates of 50% and 21%, respectively. Net income of $20.9 billion was the company’s highest read ever. 

Importantly, the company’s ad business continued to perform at a high level, with revenue of $46.8 billion again exceeding our consensus estimate and reflecting 20% year-over-year growth. As shown below, the advertising results for META have been rock-solid over recent periods, regularly bringing sizable beats.

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In addition, META continues to see nice user growth, with Family Daily Active People (DAP) improving 4% year-over-year to roughly 3.4 billion. Average revenue per user has increased likewise amid the strong advertising efforts, improving by a sizable 41% year-over-year.

The Family Daily Active People metric includes the company’s entire family of apps, encompassing Instagram, WhatsApp, Facebook, and Messenger, providing a consolidated view of activity.

Netflix Ad-Supported Tiers Provide Tailwinds

Netflix shares have been hot over the past year on the back of strong quarterly results, gaining nearly 80% compared to the S&P 500’s 26% gain. Its latest set of results added to the positivity, with continued user growth and tailwinds from ad-supported memberships pleasing investors.

Concerning key metrics in the print, Paid Net Membership Additions throughout the period reached a sizable 18.9 million, crushing our consensus estimate of 9.1 million handily. Subscriber additions for Netflix have remained rock-solid, exceeding our consensus estimate in seven consecutive releases.

The favorable reads on subscriber additions have fueled the stock’s bullish run over the past year, with margin expansion also brightening its profitability picture. In Q4, ad-supported plans accounted for over 55% of sign-ups in supported countries, and membership in ad plans grew by nearly 30% quarter over quarter.

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The stock currently sports a favorable Zacks Rank #2 (Buy), with the revisions trend for its current fiscal year moving higher following its latest results. EPS is forecasted to soar 25% in its current fiscal year.

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Bottom Line

Advertising efforts from Netflix NFLX and Meta Platforms META are paying off nicely, with each seeing tailwinds in their quarterly results.

Both stocks remain prime buy selections for growth-focused investors, with the earnings outlook for each remaining notably bullish.

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