Shares of Netflix rose greater than 14% on Tuesday after the corporate reported fourth-quarter results that beat each revenue and profit.
The company surpassed 300 million paid memberships throughout the quarter, adding a record 19 million subscribers. Netflix said the expansion was driven by its content offering, improved products and typical seasonality within the fourth quarter.
The company also said its global audience, including “additional member accounts,” is estimated to be over 700 million.
“We've really built the business on diversity and quality across all countries, regions and genres and have focused year-round on providing our members with a very strong programming offering,” Netflix co-CEO Ted Sarandos said during an investor call .
Here's how Netflix did last quarter, ended December 31, in comparison with Wall Street estimates:
- Earnings per share: $4.27 versus $4.20, in response to LSEG
- Revenue: According to LSEG, $10.25 billion versus $10.11 billion
- Paid Memberships: 301.63 million versus 290.9 million, in response to StreetAccount
Net income was $1.87 billion, or $4.27 per share, within the period, up from $938 million, or $2.11 per share, within the year-ago quarter.
Fourth-quarter revenue rose 16% year-over-year to $10.25 billion, above Wall Street's forecast of $10.11 billion.
For full-year 2025, Netflix raised its revenue expectations to a variety of $43.5 billion to $44.5 billion, about $500 million above its previous guidance, reflecting improved business fundamentals and the expected carryover advantage of its stronger-than-expected performance fourth quarter.
The fourth quarter was the last for which Netflix will report quarterly paid subscriber numbers, as previously announced. Instead, the corporate will begin publishing a semi-annual “engagement report” alongside its second and fourth quarter releases.
The streamer on Tuesday touted the success of its fourth-quarter plan, which included the discharge of the second season of the hit series “Squid Game” in addition to live sporting events akin to the record-breaking Jake Paul vs. Mike Tyson boxing match and National Football League games on Christmas Day.
“We're excited that some people came to the fight and some people came to the games, but they stayed with 'Squid Game' and with 'Carry On' and with 'Black Doves' and with 'Six Triple Eight'…” Nate Bargatzes recent comedy special,” Sarandos said. “All of those things worked really well in the quarter and continue to do so in the days and weeks after the fight and after the games.”
“And what's really most encouraging is that the retention behavior of the people who have come to these events is very similar to the people who come to all of our other major titles,” he said.
This 12 months, the corporate plans to boost its core business with more series and movies, improve its product experience and further expand its promoting business. Netflix is also expected to change into more involved in live events and gaming.
The company also plans to bring back “Strangers Things” and “Wednesday,” two of its biggest hits, in 2025. Additionally, the streamer will release a group of recent movies from top directors and actors, including Daniel Craig and Rian Johnson's third “Knives Out” film, a Russo Brothers project called “The Electric State” starring Millie Bobby Brown Lead role, “Happy Gilmore 2” with Adam Sandler and a new edition of “Frankenstein” by Guillermo del Toro.
“We are fortunate to have no distractions from managing declining linear networks and, with our focus and continued investments, to have good and improving product/market fit across the globe,” the corporate said in its earnings report on Tuesday.
Netflix also announced that it could increase prices for some streaming tiers by between $1 and $2 per 30 days.
Netflix's cheaper, ad-supported tiers accounted for greater than 55% of sign-ups in countries where the choice is obtainable, the corporate said. Netflix also noted that memberships for its ad-supported plans increased about 30% quarter-over-quarter.
“We are on track to achieve sufficient reach for Ads members in all of our advertising countries in 2025,” the corporate said. “One of our top priorities in 2025 is to improve our offering to advertisers so that we can significantly increase our advertising.”
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