Netflix Surges to All-Time High, Adding 18.9 Million Users in Q4

Wall Street Praises Earnings, Raises Price Targets

Netflix (NFLX) stock soared nearly 10% on Wednesday, closing at an all-time high as analysts hailed the company's exceptional fourth-quarter earnings results.

Strong User Growth

The streaming giant reported a staggering 18.9 million new users in Q4, exceeding expectations and marking its largest quarterly subscriber gain ever. Wall Street analysts attributed this growth to Netflix's successful live sports programming, including NFL games and the Jake Paul vs. Mike Tyson boxing match.

Revenue and Earnings Beat Forecasts

Revenue for the quarter hit $10.25 billion, surpassing consensus estimates of $10.11 billion. Diluted earnings per share (EPS) also came in above expectations, with $4.27 reported compared to $4.18 estimated.

Analysts Express Optimism

Analysts were highly encouraged by Netflix's performance and raised their price targets. Pivotal Research set the highest target at $1,250 per share, citing the company's continued subscriber growth and revenue potential.

Stock Buyback and Revenue Outlook

Netflix announced a $15 billion stock buyback and boosted its full-year revenue outlook. The company now projects 2025 revenue between $43.5 billion and $44.5 billion, exceeding previous expectations.

Price Hikes Implemented

To monetize its growing user base, Netflix raised prices for its ad-supported and ad-free tiers. The ad-supported plan now costs $7.99, while the Standard tier is $17.99 and the Premium tier is $24.99.

Advertising Revenue Growth

Advertising revenue doubled in 2024, and Netflix management expects it to double again in 2025. However, the company still anticipates traditional subscription fees to remain its primary revenue driver until 2026.

Netflix's Live Events Strategy

Netflix's co-CEO highlighted that live events did not significantly drive the subscriber surge in Q4. However, the company remains committed to its live programming strategy and is rumored to be exploring bidding for UFC rights.

Other Metrics

Operating margins remained strong at 22.2% in Q4 and 27% for the full year 2024. Netflix expects Q1 operating margins to expand to 28.2%.