Shares of Netflix rose more than 14% on Tuesday after the company reported fourth-quarter results that beat both revenue and profit.
The company surpassed 300 million paid memberships during the quarter and reached a record 19 million subscribers. Netflix said the growth was driven by its content offering, improved products and typical seasonality in 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 performed compared to Wall Street estimates in its most recent quarter ended Dec. 31:
- Earnings per share: $4.27 versus $4.20, according to LSEG
- Revenue: According to LSEG, $10.25 billion versus $10.11 billion
- Paid Memberships: 301.63 million versus 290.9 million, according to StreetAccount
Net income was $1.87 billion, or $4.27 per share, in the period, up from $938 million, or $2.11 per share, in 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 range of $43.5 billion to $44.5 billion, about $500 million above its previous forecast. This reflects improving business fundamentals and the expected carryover benefit from its stronger-than-expected fourth quarter performance.
The fourth quarter was the last for which Netflix will report quarterly paid subscriber numbers, as previously announced. Instead, the company 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 release of the second season of the hit series “Squid Game,” as well as live sporting events such as the record-breaking boxing match between Jake Paul and Mike Tyson 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 new 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 year, the company plans to enhance its core business with more series and films, improve its product experience and further expand its advertising business. Netflix is also expected to become more involved in live events and gaming.
In 2025, the company also expects the return of “Strangers Things” and “Wednesday,” two of its biggest hits. Additionally, the streamer will release a collection of new films 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 Starring, “Happy Gilmore 2” with Adam Sandler and a new version 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 company said in its earnings report on Tuesday.
Netflix also announced that it would increase prices for some streaming tiers by between $1 and $2 per month.
Netflix's cheaper, ad-supported tiers accounted for more than 55% of sign-ups in countries that offer the option, according to the company. 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 company said. “One of our top priorities in 2025 is to improve our offering to advertisers so that we can significantly increase our advertising.”
Comments are closed.