Netflix said it added a record 18.91m paid global subscribers in the fourth quarter as its recent foray into live sports and the debut of Squid Games 2 helped raise the total to 301.6m.
As previously announced, staring in April’s earnings call the platform will no longer provide quarterly subscriber updates as it focuses on financials, although it will offer milestone updates. That said, co-CEO Ted Sarandos said they will release a biannual engagement report with Q2 and Q4 earnings. Shares climbed by more than 14% in after hours trading
Revenue crossed $10bn for the first time in the company’s history on $10.2bn, beating Wall Street estimates of $10.1bn, while revenue grew by 16% year-on-year, and operating margin reached 22.2% and earnings per share of $4.27 beat $4.21 estimates.
Prices are going up. The Standard With Ads plan in the US will climb from $6.99 to $7.99 a month; Standard (ad-free) is increasing from $15.59 to $17.99; and Premium is increasing from $22.99 to $24.99.
The company name-checked last quarter’s live sports content including the Mike Tyson-Jake Paul boxing bout and the two NFL American Football games on December 25 and the company expects to ramp up in this area. The original Taron Egerton thriller Carry-On was another highlight for the quarter ended December 31, 2024.
Netflix does not break out advertising revenues, however co-CEO Greg Peters said that side of the business was experiencing “significant growth” since it launched in November 2022. He said the ad-supported tier accounted for more than 55% sign-ups across all countries where it is offered, with engagement roughly on par with ad-free plans.
Advertising revenue in 2024 doubled year-on-year and is expected to do the same in 2025. The company’s proprietary “ad stack” tech platform, which trialled in Canada last year, will roll out into the US in April and the other 11 countries where the advertising tier is offered by the end of 2025.
Addressing production in the wake of the LA County wildfires, co-CEO Ted Sarandos said there was “no meaningful” delay to planned productions, while there was “very meaningful disruption in people’s lives”. He added, “It’s really important we try not to delay anything and make sure these jobs stay safe.”
Sarandos said the recent deal with Imax to exhibit Greta Gerwig’s Narnia exclusively for two weeks in 2026 prior to the platform drop does not indicate a theatrical strategy shift. “No change at all […] Our core strategy is to give our members exclusive first-run movies on Netflix,” the executive said, adding that the company will continue to give theatrical uplifts for premium festival and awards season contenders.
Netflix is projecting 2025 revenue of $43.5bn-$44.5bn, representing 12%-14% year-on-year growth. The company’s forecast is approximately $500m higher than its prior range, due to “improved business fundamentals and the expected carryover benefit of our stronger-than-forecasted Q4’24 performance, net of headwinds from the strengthening of the US dollar over the past few months”.
For Q1 2025 Netflix said it expects revenue growth of 11%, “modestly below our full year guidance due to the timing of price changes and the seasonality of our ads business”.
2024 delivered a record 41m net subscriber additions and a 16% increase in revenue. “Our business remains intensely competitive with many formidable competitors across traditional entertainment and big tech,” the company said in its letter to shareholders. We’re fortunate that we don’t have distractions like managing declining linear networks and, with our focus and continued investment, we have good and improving product/market fit around the world.”
The 2025 feature roster includes Guillermo del Toro’s Frankenstein, Kathryn Bigelow’s untitled White House thriller, the next Knives Out film Wake Up Dead Man from Rian Johnson, the Russo brothers’ action film The Electric State, and Happy Gilmore 2. The TV slate includes new seasons of Wednesday, Stranger Things, The Night Agent, Japan’s Alice In Borderland, and India’s Delhi Crime. Netflix streams the SAG Awards on February 23.
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