Netflix on Tuesday blew past Wall Street subscriber estimates within the fourth quarter, driven by a robust slate of shows that included the ultimate season of the long-running royal drama “The Crown” and David Fincher’s original film, “The Killer.”
The corporate reported it added 13.1 million subscribers within the December quarter, its largest fourth-quarter subscriber growth ever, handily exceeding projected gains of 8.97 million.
That brings the overall variety of subscribers to 260 million.
Shares jumped greater than 5% in after hours trading to $518.98. The stock gained 65% during 2023.
Netflix reported per-share earnings of $2.11, falling wanting consensus estimates of $2.22 per share.
The corporate said the per-share earnings were impacted by a $239 million noncash loss related to currency exchange rates. Revenue rose to $8.8 billion, topping forecasts and the corporate’s own guidance of $8.7 billion within the quarter.
The corporate reported it added 13.1 million subscribers within the December quarter, AFP via Getty Images
The streaming giant said it expects healthy double-digit revenue growth for full-year 2024, because it continues so as to add members and put money into its promoting business. Netflix said promoting isn’t yet a primary driver of revenue growth, but it surely goals for that to alter by 2025.
“It’s becoming increasingly clear that Netflix has won the ‘streaming wars,” wrote Bank of America media analyst Jessica Reif Ehrlich.
The corporate credited gains to the strength of its mental property, including “Squid Game: The Challenge,” a reality show based on its most-watched TV series, recent original series, reminiscent of “All of the Light We Cannot See,” feature movies like Zack Snyder’s “Rebel Moon: A Child of Fire,” and non-English-language programming, including the third season of “Lupin” from France.
David Fincher’s ‘The Killer’ AP
It also cited strong demand for licensed titles.
“Looking ahead, despite last 12 months’s strikes pushing back the launch of some titles, we now have a big-bold slate for 2024,” the corporate said.
The corporate predicted possible further industry consolidation, particularly amongst corporations with large and declining television networks. Netflix said it isn’t enthusiastic about acquiring traditional TV assets.
It said deals involving media corporations are unlikely to alter the competitive landscape, given the mergers which have already occurred, though it expects ongoing competition for people’s time – including from gaming and social media.
Netflix said there’s opportunity to grow, if it continues to enhance its programming slate, simplify finding something to look at and cultivate fan bases, and establishes itself in recent areas like promoting and games. While the games business continues to be in its early days, the corporate said engagement has tripled.
“The market had already largely priced in an expected double-digit climb in revenue growth, but investors are cheering a fair better-than-expected result,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown. “The meaningful growth in subscriber numbers is partly a results of password-sharing crackdowns, but can be testament to Netflix’s ability to maintain us glued to screens.”
The streaming service said it continues to speculate in and experiment with live programming. Earlier on Tuesday, Netflix and TKO Group Holdings announced a greater than $5 billion deal to bring World Wrestling Entertainment’s “Raw” and another programming exclusively on the streaming service in January 2025.
The ultimate season of the long-running royal drama “The Crown” lifted Netflix’s subscriber count. AP
It also touted its first stage production, “Stranger Things: The First Shadow,” based on its hit series.
Antenna Research found that Netflix has the bottom monthly churn rate amongst streaming services, with just 2% of subscribers canceling within the month of December.
Media analyst John Hodulik predicted the corporate would also proceed to learn from its crackdown on password-sharing, which he forecast would drive a 5% lift to revenue within the quarter.
Ted Sarandos is Netflix’s co-CEO. Getty Images
This crackdown will likely fuel the expansion of Netflix’s advertising-supported tier, wrote Ehrlich. The corporate recently announced it had 23 million global lively users on the version of the service with ads, up from 15 million in November.
Ehrlich said Netflix is also a beneficiary of adjusting market dynamics, that are forcing media corporations to re-evaluate their strategy of retaining movies and tv series exclusively for their very own streaming services. She called this a “win-win” proposition, which allows Netflix to cut back its investment in higher-risk original production, at the same time as these licensing deals provide other media corporations with much-needed revenue.
