Netflix Surges on Record Subscriber Gains, Fueled by Live Sports and 'Squid Game'

Netflix Inc. (NFLX) concluded 2024 with an unprecedented surge in quarterly subscriber acquisition, driven by the introduction of major live sporting events and the return of its blockbuster series "Squid Game."

Strong Subscriber Growth

The streaming giant reported a remarkable 18.9 million net subscriber additions in the fourth quarter, surpassing Wall Street estimates by more than double. Netflix's global subscriber base now stands at over 300 million, eclipsing its previous record of 15 million net additions in Q1 2020.

Shift in Reporting

This quarter marks the final time Netflix will disclose quarterly subscriber numbers. The company's management aims to redirect investor focus towards financial metrics such as revenue and profit, despite the historical correlation between stock performance and subscriber growth.

Financial Performance

Netflix reported a 16% revenue increase to $10.2 billion for the quarter, its highest gain since late 2021. The company anticipates revenue to outpace initial projections in 2025, aided by price increases in key markets.

Content and Live Programming

Netflix credits its subscriber surge to a diverse content lineup, including the hit movie "Carry-On" and the second season of "Squid Game." Live programming, particularly the boxing match between Jake Paul and Mike Tyson and the Beyoncé halftime performance during an NFL game, attracted record sign-ups.

Advertising Progress

Netflix's advertising revenue stream is gaining traction, with the majority of new customers opting for the ad-supported plans. The company expects to reach sufficient scale to meet advertiser demand by year-end.

Diversification Efforts

While Netflix remains focused on expanding its programming, the company's foray into video games has seen limited success. However, Netflix is exploring partnerships for major sporting events, such as the FIFA Women's World Cup and the Ultimate Fighting Championship.

Financial Outlook

For the year, Netflix projects revenue of up to $44.5 billion, a 14% increase, with an operating margin of 29%. Shares of NFLX surged as high as 15% in after-hours trading, potentially reaching a new all-time high during regular trading on Wednesday.

Conclusion

Netflix's record subscriber growth demonstrates its continued dominance in the streaming industry. The company's focus on live programming and advertising revenue generation, along with its ongoing content diversification efforts, positions it for sustained growth in the years ahead.