Netflix Jumps 14% in After-Hours Trading on Strong Subscriber Growth and Earnings
Netflix (NFLX) stock surged over 14% in after-hours trading on January 17th, 2025, following an impressive fourth-quarter performance. The streaming giant reported a whopping 18.9 million new users, exceeding expectations by a significant margin. The company's revenue and earnings also handily beat estimates, driving the stock's surge.
In addition, Netflix announced a $15 billion stock buyback and boosted its full-year revenue outlook. The company now projects 2025 revenue between $43.5 billion to $44.5 billion, ahead of the prior $43 billion to $44 billion range.
The strong subscriber gains come as Netflix ended 2024 with a series of successful events, including two back-to-back NFL games, a popular "Jake Paul vs. Mike Tyson" boxing match, and the return of "Squid Game." However, the company also announced price hikes for its ad-supported, Standard, and Premium plans, which analysts had expected.
Despite its recent push into live sports programming, Netflix Co-CEO Greg Peters emphasized that no single event was responsible for the surge in subscribers. Live events accounted for only a minority of new customers in the quarter.
Nevertheless, Netflix's live events boom has been a significant factor in its recent success. The company plans to continue doubling down on sports with its recent WWE Raw debut and rumored bid for UFC rights.
Revenue hit $10.25 billion in Q4, beating Bloomberg consensus estimates for $10.11 billion and marking an increase of 16% compared to the same period last year. Netflix guided to first quarter revenue of $10.42 billion, slightly below consensus estimates of $10.48 billion.
Diluted earnings per share (EPS) also beat estimates in the quarter, with the company reporting EPS of $4.27, above consensus expectations of $4.18 and well ahead of the $2.11 EPS figure it reported in the year-ago period. Netflix guided to fourth quarter EPS of $5.58, below consensus calls for $6.01.
Other profitability metrics also came in strong, with operating margins sitting at 22.2% in the fourth quarter and 27% for full-year 2024. Netflix expects Q1 operating margins to expand to 28.2%.