Actions of netflix soared more than 14% on Tuesday after the company posted top-performing fourth-quarter results.
The company surpassed 300 million paid memberships during the quarter, adding a record 19 million subscribers. Netflix said the growth was driven by its content slate, improved products and typical fourth-quarter seasonality.
The company also shared that including “additional member accounts,” its global audience is estimated to be over 700 million.
“We've really built the business on variety and quality in every country, in every region, in every genre and we've really focused all year on having very strong programming for our members,” said co-director Netflix executive Ted Sarandos during an investor call.
Here's how Netflix performed in its most recent quarter, ended Dec. 31, compared to Wall Street estimates:
- Earnings per share: $4.27 vs. $4.20, according to LSEG
- Revenue: $10.25 billion vs. $10.11 billion, according to LSEG
- Paid Memberships: 301.63 million versus 290.9 million, according to StreetAccount
Net income for the period was $1.87 billion, or $4.27 per share, compared to $938 million, or $2.11 per share, during the same quarter a year earlier.
Revenue in the fourth quarter rose 16% year over year, reaching $10.25 billion, more than the $10.11 billion Wall Street had forecast.
For the full year 2025, Netflix raised its revenue expectations to a range of $43.5 billion to $44.5 billion, about $500 million higher than its previous forecast to reflect better business fundamentals and expected carryover profit from its fourth quarter performance stronger than expected.
The fourth quarter was the last in which Netflix will report quarterly paid subscriber counts, as previously announced. Instead, it will begin reporting a semi-annual “engagement report” alongside its second and fourth quarter releases.
On Tuesday, the streamer touted the success of its fourth-quarter slate, which included the launch of Season 2 of the hit series “Squid Game,” as well as live sporting events like Jake Paul and Mike Tyson's record-breaking boxing match and national football. League matches on Christmas Day.
“We're delighted that some people came to the fight and others to the games, but they stayed for 'Squid Game,' 'Carry On,' 'Black Doves' and 'Six Triple Eight'… The new comedy special from Nate Bargatze,” Sarandos said. “All of those things worked very well in the fourth and continue to do so in the days and weeks after the fight and after the games.
“And what's really been most encouraging is the retention behavior of those people who attended those events and they look a lot like the people who attended all of our other big titles,” he said.
This year, the company said it plans to enhance its core business with more series and movies, improve its product experience and continue to grow its advertising business. Netflix is also expected to delve into the live events and gaming space.
The company is also planning the return of “Strangers Things” and “Wednesday,” two of its biggest hits, in 2025. In addition, the streamer will release a collection of new films from top directors and actors, including the third from Daniel Craig and Ryan Johnson. Knives Out,” a Russo Brothers project called “The Electric State” starring Millie Bobby Brown, “Happy Gilmore 2” with Adam Sandler and a remake of Guillermo del Toro's Frankenstein.
“We are fortunate to not have distractions like declining linear network management and, with our focus and continued investment, we have good and improving product/market fit around the world,” the company said in its earnings report Tuesday. .
Netflix also announced that it would increase prices on some streaming tiers by $1 to $2 per month.
Netflix's cheaper, ad-supported tiers accounted for more than 55% of subscriptions in countries where the option is offered, the company said. Netflix also noted that memberships in its ad-supported plans grew about 30% quarter over quarter.
“We are on track to achieve sufficient scale for advertising members in all of our advertising countries in 2025,” the company said. “One of the top priorities in 2025 is to improve our offer to advertisers so that we can substantially increase our advertising.”
