Netflix Surges to All-Time High on Stellar Earnings
Notable Metrics:
* NFLX stock rose over 10% to $1,000 per share.
* Pivotal Research set a target price of $1,250, the highest on Wall Street.
* Netflix added a record 18.9 million new users in Q4.
* Revenue and earnings exceeded expectations.
Key Findings:
* Netflix attributed the subscriber surge to a diverse lineup, including NFL games, the "Jake Paul vs. Mike Tyson" boxing match, and the return of "Squid Game."
* The company announced a $15 billion stock buyback and raised its full-year revenue outlook to $43.5-$44.5 billion.
* Netflix plans to increase subscription prices for its ad-supported plan ($7.99) and ad-free tiers ($17.99-$24.99).
Advertising Revenue and Live Events:
* Advertising revenue doubled in 2024 and is projected to double again in 2025.
* Live NFL games and the Paul-Tyson match attracted significant viewership, contributing to Netflix's success.
* Netflix focuses on "can't-miss, special event programming" for live events rather than regular season sports packages.
Financial Performance:
* Q4 revenue reached $10.25 billion, beating estimates.
* Diluted EPS of $4.27 surpassed expectations.
* Operating margins improved to 22.2% in Q4 and 27% for 2024.
Outlook and Competition:
* Netflix guided to first quarter EPS of $5.58, below consensus calls.
* The company acknowledged intense competition but emphasized its strong product-market fit and focus on growth.