Shares in Netflix surged to a record high on Tuesday after it exceeded market estimates with its results for the fourth quarter (Q4) of 2024.
The American streaming giant said diluted earnings per share (EPS) more than doubled to US$4.27(A$6.89) in Q4, from $2.11 in the previous corresponding period (pcp) and versus the consensus forecast of $4.20.
It said quarterly operating income soared 52% to $2.273 billion on revenue which climbed 16% to $10.247 billion, the first time above $10 billion, as the operating margin expanded to 22.2% from 16.9%.
Publishing its Q4 results after regular trading, Netflix said average paid memberships rose 19 million (15%) in Q4, the most in its history, to 302 million at 31 December.
Netflix Inc (NASDAQ: NFLX) shares surged in after-hours trading to $993.99, its highest ever, up $123.55 (14.21%), after finishing at $869.68 before the quarterly results were announced.
Netflix said its Q4 “slate” outperformed even its high expectations with:
- Squid Game season 2 on track to become one of its most watched original series
- Carry-On joining its all-time top 10 films list
- the Jake Paul vs. Mike Tyson fight the most-streamed sporting event ever, and
- two NFL games streamed on Christmas Day, the most streamed in history.
Based on 1 January foreign exchange rates, it projected 2025 revenue of $43.5 billion to $44.5 billion (compared with $39.001 billion in 2024), $500 million higher than its prior forecast range.
The company said its 2025 priorities were to:
- improve its core business with more series and films its members loved, an enhanced product experience and growth of its advertisements business
- further develop newer initiatives such as live programming and games, and
- sustain healthy growth and an operating margin of 29%, up one point from the prior forecast, despite the strengthening of the US dollar
“We maintain a leadership position in engagement, revenue and profit,” Netflix said in a letter to shareholders.
“We’re focused on improving all aspects of our service and, combined with the return in 2025 of our biggest shows (Squid Game, Wednesday and Stranger Things), we’re optimistic heading into the new year.”
Amid the record high earnings, Netflix also hiked their subscription prices. These are the price increases:
- Standard Plan without ads: This tier increases from US$15.49 (A$24,69) to US$17.99 (a US$2.50/mo price hike).
- Ad-Supported: The cheapest tier will now be US$7.99 per month up from US$6.99 (a US$1/mo price hike).
- Premium: This tier will cost US$24.99 per month, up from US$22.99 month (a US$2/mo price hike).
- The cost of adding an Extra Member to a primary account is going up from US$7.99 to US$8.99 per month (a US$1/mo price hike).
“As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix,” the company told investors.
“To that end, we are adjusting prices today across most plans in the U.S., Canada, Portugal and Argentina (which was already factored into the 2025 guidance we provided in October 2024).”
The last time Netflix increased prices was in October 2023.
Additional reporting by Chloe Jaenicke.
