Netflix Surges on Strong Subscriber Growth, Revenue Beat
Summary:
Netflix (NFLX) saw its stock price jump over 14% in pre-market trading following a robust fourth-quarter report. The streaming giant added a record 18.9 million users, significantly exceeding expectations. Revenue and earnings also surpassed analyst estimates.
Key Highlights:
* Biggest quarterly subscriber gain in Netflix's history
* Q4 revenue hit $10.25 billion, up 16% year-over-year
* Earnings per share (EPS) at $4.27, beating expectations
* Price hikes announced for selected subscription plans
* Live events, including NFL games and boxing matches, contributed to subscriber growth
* Strong operating margins and projected revenue growth for 2025
Details:
Netflix's subscriber surge was not attributed to a single event despite the recent focus on live sports programming. Live events accounted for a small portion of new customers in the quarter.
The company's focus on special event programming and avoiding large regular season sports packages has helped it differentiate its live strategy.
Other profitability metrics remain strong, with operating margins at 22.2% in Q4 and 27% for the full year 2024. Netflix anticipates further expansion in operating margins in Q1.
Price Hikes:
Netflix announced price increases for some of its plans:
* Ad-supported plan: $7.99 (up from $6.99)
* Standard, ad-free tier: $17.99 (up from $15.49)
* Premium plan: $24.99 (up from $22.99)
* Extra member: $8.99 (up from $7.99)
Outlook:
Netflix projected 2025 revenue between $43.5 billion and $44.5 billion, higher than the previous range of $43 billion to $44 billion. The company remains optimistic about its competitive position and plans to continue investing in its product offerings.