Netflix ended the holiday quarter of 2024 on a high note, adding 18.9 million new subscribers, significantly surpassing Wall Street expectations. The surge in users was driven by live sporting events and the highly anticipated return of the South Korean series Squid Game, which continues to captivate global audiences.
A Record-Breaking Quarter For Netflix
In its fourth-quarter earnings report released on Tuesday, Netflix revealed that its programming lineup exceeded internal targets. The Jake Paul vs. Mike Tyson boxing match emerged as the most-streamed sporting event on the platform. Additionally, two National Football League (NFL) games aired on Christmas Day became the most-streamed competitions in the league’s history.
The second season of Squid Game, Netflix’s dystopian thriller that gained international acclaim in 2021, also played a pivotal role in attracting viewers. The company noted that the series is poised to become one of its most-watched originals, further cementing its status as a cultural phenomenon.
Netflix To Increase Price in Key Markets
As Netflix continues to invest in content that resonates with its global audience, it announced price increases for most subscription plans in the United States, Canada, Portugal, and Argentina.
- The basic plan with ads in the U.S. will increase by $1 to $7.99 per month, a 14% hike.
- The premium plan will rise by $2, bringing the monthly cost to $24.99, a 9% increase.
The company stated that these changes are necessary to fund high-quality programming and enhance user experience.
Netflix has maintained the lowest cancellation rate among subscription-based streaming platforms, with a churn rate of just 1.8% in December, according to research firm Antenna. This customer loyalty highlights the platform’s ability to retain subscribers even amidst rising competition in the streaming market.
Netflix’s Earnings and Revenue Exceed Expectations
Netflix reported earnings of $4.27 per share, surpassing analysts’ projections of $4.20 per share, based on estimates from 34 industry experts. Annual operating income reached a historic $10 billion, marking the first time the company has crossed this milestone.
Revenue for the quarter rose by 16% compared to the same period last year, reaching $10.2 billion, slightly ahead of Wall Street’s forecast of $10.1 billion, according to data from LSEG.
Looking Ahead to 2025
Netflix expressed optimism in its note to investors, stating, “We enter 2025 with strong momentum.” The company reported adding a record 41 million subscribers in 2024, showcasing a return to growth after a period of stagnation.
Netflix revised its 2025 revenue guidance, projecting between $43.5 billion and $44.5 billion, an increase of $500 million from its prior forecast. This adjustment reflects the company’s improved business performance and strategic investments in content and infrastructure.
Netflix to Shift Focus to Revenue and Profit Metrics
This quarter marks the final time Netflix will report subscriber additions as a primary performance indicator. Moving forward, the company will prioritize metrics like revenue and profitability, signaling a shift in focus as subscriber growth begins to stabilize.
With its robust programming slate and strategic financial moves, Netflix appears poised to maintain its position as a leader in the global streaming market, even as competition intensifies.