Streaming Giant Continues to Dominate
Netflix solidified its position as the leading streaming service provider, boasting a record-breaking 18.9 million new subscribers in the fourth quarter, bringing its global customer base to a staggering 302 million. This impressive growth can be attributed to its diverse range of content, including live sporting events, popular returning series, and unique moments like Beyoncé’s halftime performance at a Christmas Day NFL game.
A Winning Formula
The company’s strategy to invest in high-quality content has paid off, with its programming slate surpassing expectations. The second season of the dystopian thriller “Squid Game” is on track to become one of its most-watched original series, while live-streamed events like the Jake Paul vs. Mike Tyson boxing match and NFL games drew in tens of millions of viewers.
Pricing Power
Netflix is capitalizing on its popularity by raising prices in several countries, including the US, Canada, Portugal, and Argentina. The ad-supported service will now cost $7.99 a month, up from $6.99, while the premium package will increase by 9% to $24.99. This move is expected to generate significant revenue for the company.
Investor Confidence
The news sent Netflix’s stock soaring by 13% in extended trade, adding almost $50 billion to its market value. Over the past year, Netflix shares have gained an impressive 77%, outpacing the S&P 500’s 24% rise. Analysts are optimistic about the company’s future, citing its strong programming slate and ability to attract new subscribers.
Live Events Drive Growth
Netflix’s investment in live events is paying off, with the company securing the rights to broadcast the FIFA Women’s World Cup in 2027 and 2031. This strategy is expected to attract more advertisers, as live events draw in audiences that watch in real-time. The company’s ad revenue is expected to double this year, reaching $2 billion.
Shifting Focus
As Netflix’s subscriber growth slows, the company is shifting its focus to other performance metrics, including revenue and profit. This quarter marks the last time Netflix will report subscriber additions, a move analysts attribute to the company’s maturing business model.
Financial Performance
Netflix reported per-share earnings of $4.27, beating Wall Street’s forecast of $4.20 per share. Annual operating income exceeded $10 billion for the first time in the company’s history, while revenue rose 16% to $10.2 billion. The company revised its guidance, projecting revenue of $43.5 billion to $44.5 billion in 2025, an increase of half a billion dollars over the prior forecast.
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