Netflix's Q4 Revenue and Earnings Surge, Boosted by Subscriber Gains
Netflix (NFLX) shares soared over 14% in after-hours trading following its Q4 earnings report. The streaming giant surpassed expectations with a substantial subscriber increase, revenue growth, and strong earnings.
Subscriber Surge Drives Growth
Netflix gained a remarkable 18.9 million subscribers in Q4, exceeding analysts' estimates of 9.18 million. This surge was fueled by the success of NFL games, the Jake Paul vs. Mike Tyson boxing match, and the return of "Squid Game."
Price Hikes Announced
To offset the subscriber growth, Netflix announced price increases for its ad-supported, Standard, and Premium plans in the US, Canada, Portugal, and Argentina. The ad-supported plan will now cost $7.99, the Standard plan will increase to $17.99, and the Premium plan will rise to $24.99.
Earnings Beat Expectations
Netflix's revenue for Q4 reached $10.25 billion, surpassing estimates of $10.11 billion. It also reported diluted earnings per share (EPS) of $4.27, exceeding expectations of $4.18.
Full-Year Outlook Revised
Netflix raised its full-year revenue forecast to between $43.5 billion and $44.5 billion, up from its previous range of $43 billion to $44 billion. Operating margins are expected to expand in Q1 and throughout 2023.
Live Events Strategy
Despite the recent push into live sports programming, Netflix emphasized that its strategy focuses on "can't-miss, special event programming" rather than acquiring rights to large regular season sports packages.
Competition and Outlook
Netflix acknowledged the competitive nature of the industry but expressed confidence in its product-market fit and continuous investments.