Netflix reaffirmed its dominance of the streaming market, adding 18.9 million subscribers in its fourth quarter, bringing its total global subscriber base to nearly 302 million.
This growth surpassed Wall Street’s estimate of 9.2 million additions and marked a major achievement for the company. The success is largely attributed to a strong content lineup, including live sports events, popular returning series, and special moments like a halftime performance by Beyoncé.
The company also ventured into live sports streaming, broadcasting two NFL games on Christmas Day and securing U.S. broadcast rights for the 2027 and 2031 FIFA Women’s World Cups.
Netflix’s stock soared over 14% in premarket trading on Wednesday, lifting its market capitalization by $53 billion to approximately $425 billion. This increase follows the company’s strong holiday quarter, which exceeded expectations in both revenue and profit.
The surge in subscriber numbers, however, did not immediately translate into a major revenue spike, as sign-ups occurred throughout the quarter. Despite this, Netflix reported revenue of $10.2 billion, a 16% increase from the previous year, and operating income exceeding $10 billion for the first time in the company’s history.
Netflix also raised prices in the U.S., Canada, Portugal, and Argentina, with the ad-supported service in the U.S. now priced at $7.99 a month, up from $6.99, and the premium package at $24.99, a 9% increase. These price hikes are part of the company’s strategy to fund its growing programming budget and capitalize on its increasing popularity.
The ad-supported version of the service now accounts for 55% of new sign-ups in countries where it is available, with ad revenue doubling year over year.
The company’s entry into live sports streaming is proving successful, with the heavyweight boxing match between Jake Paul and Mike Tyson in November drawing 65 million streams. Netflix also secured rights for WWE’s “Monday Night Raw” and other live events, further boosting its appeal to advertisers, as live broadcasts attract real-time viewers.
Netflix has decided to focus less on subscriber growth in its future reports, emphasizing other performance metrics like revenue and profit. This change comes as subscriber growth slows, but its financial fundamentals remain strong.
Netflix expects 2025 revenue to be between $43.5 billion and $44.5 billion, revising its forecast upward by $500 million.
Additionally, Netflix’s board approved an incremental $15 billion share buyback, bringing the total buyback authorization to $17.1 billion, further signaling confidence in the company’s growth strategy. The stock’s 12-month forward price-to-earnings ratio stands at 35.43, compared to Disney’s 19.19, reflecting investors’ optimism about Netflix’s future prospects.
