Shares of Netflix surged over 14% on Tuesday following the company’s fourth-quarter results exceeding expectations.
During the quarter, Netflix reached over 300 million paid memberships, with a record 19 million new subscribers. The company attributed this growth to its content lineup, improved product, and typical fourth-quarter seasonality.
Netflix also revealed that its global audience, including “extra member accounts,” now surpasses 700 million.
“We have focused on providing a strong slate of programming for our members year-round across countries, regions, and genres,” said Netflix co-CEO Ted Sarandos during an investor call.
Here’s a summary of Netflix’s performance for the most recent quarter ended Dec. 31, compared to Wall Street estimates:
- Earnings per share: $4.27 vs. $4.20 (LSEG)
- Revenue: $10.25 billion vs. $10.11 billion (LSEG)
- Paid memberships: 301.63 million vs. 290.9 million (StreetAccount)
Net income for the quarter was $1.87 billion, or $4.27 per share, up from $938 million, or $2.11 per share, in the same quarter the previous year.
Revenue in the fourth quarter grew 16% year over year to $10.25 billion, surpassing Wall Street’s prediction of $10.11 billion.
For 2025, Netflix raised its revenue outlook to $43.5 billion to $44.5 billion, reflecting stronger business fundamentals and the positive impact of its robust fourth-quarter performance.
The fourth quarter marked the final time Netflix will report quarterly paid subscriber counts, transitioning to a biannual “engagement report” starting with the second and fourth-quarter releases.
Netflix highlighted the success of its fourth-quarter lineup, which included the release of “Squid Game” season 2 and live sporting events like the Jake Paul vs. Mike Tyson boxing match and NFL games on Christmas Day.
The company plans to focus on enhancing its core business with more content, improving the user experience, expanding its ads business, and exploring opportunities in live events and gaming.
Upcoming releases for 2025 include new seasons of “Stranger Things” and “Wednesday,” as well as new films featuring A-list talent like Daniel Craig, Rian Johnson, Millie Bobby Brown, Adam Sandler, and Guillermo del Toro.
Netflix also announced a price increase of $1 to $2 per month for some streaming tiers.
According to Netflix, over 55% of sign-ups in countries offering ad-supported tiers are for the cheaper plans, with a 30% growth in ad-supported memberships quarter over quarter.
The company aims to reach scale for ads members in all ad-supported countries by 2025 and enhance its advertising offerings to drive substantial growth.
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