Netflix Soars to New Heights with Stellar Q4 Earnings
The streaming giant’s stock surged to an all-time high, rising as much as 13.6% in early trading on Wednesday, as Wall Street analysts praised the company’s fourth quarter earnings results.
A Record-Breaking Quarter
Netflix reported a whopping 18.9 million users in the fourth quarter, the biggest quarterly subscriber gain in the company’s history. Revenue and earnings also handily beat expectations, with revenue hitting $10.25 billion, a 16% increase compared to the same period last year.
Analysts Weigh In
“Q4 results were near flawless,” said Jefferies analyst James Heaney in a note following the report. Pivotal Research upped its target from $1,000 a share to $1,250, the highest on the Street.
A Strong Finish to 2024
Including Wednesday’s price action, Netflix stock has surged about 100% year over year. Shares hit several all-time highs in 2024, as many analysts call Netflix the winner of the hard-fought streaming wars.
A $15 Billion Stock Buyback and Boosted Revenue Outlook
The company also announced a $15 billion stock buyback and boosted its full-year revenue outlook in its after-hours report on Tuesday. Netflix now projects 2025 revenue between $43.5 billion and $44.5 billion, ahead of the prior $43 billion to $44 billion range.
Price Hikes and Advertising Revenue
The strong subscriber gains come as the streamer ended 2024 with two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match, and the return of “Squid Game.” The company raised the price of its ad-supported plan to $7.99 from the prior $6.99, and its Standard, ad-free tier will now be $17.99, up from $15.49.
Advertising Revenue Doubles
The company revealed advertising revenue doubled in 2024 and management guided to it doubling again in 2025. Still, ad revenue is not expected to become a primary revenue driver until 2026.
Live Sports Programming Push
On the earnings call, Netflix co-CEO Greg Peters said the huge jump in subscribers wasn’t driven by one particular event, despite its recent live sports programming push. Analysts were largely encouraged by this commentary, with Deutsche Bank’s Bryan Kraft writing to clients, “Management was very clear that the strength in 4Q net adds was not driven disproportionately by the Tyson vs Paul fight, the NFL, or any other title; therefore, we see no reason why the strength will not continue.”
A Focus on Special Event Programming
Netflix said in its shareholder letter it’s not focused on rights for “large regular season sports packages; rather, our live strategy is all about delivering can’t-miss, special event programming.” The company will continue to double down on sports amid the recent debut of WWE Raw, and rumors have also swirled the company could bid on UFC rights next.
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