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Record user growth
The streaming giant said in its fourth-quarter 2024 earnings results, released on 21 January 2024, that it managed to gain the highest number of new subscribers ever for a quarter globally. That number exceeded 18.9 million, bringing the total to more than 300 million users at the end of last year. In year-on-year terms, that's an increase of almost 16%. Meanwhile, the last time it reached such a high increment was in the first quarter of 2020 at the start of the pandemic, when it gained almost 16 million new users. Starting this year, however, Netflix is discontinuing the publication of this data along with the amount of average revenue per user. It will only report when it exceeds certain milestones, as it prefers to focus on other metrics such as earnings or earnings per share (EPS). Meanwhile, it announced this change back in April 2024. Record levels and a continued drive to improve service led to the decision to raise prices on all plans. The price for the standard plan, along with the option to add Extra Users, is increasing by $1, while users will pay up to $2.50 for the premium subscription and ad-free plan. However, these changes only affect Portugal, Argentina, the US and Canada. Netflix's co-CEO, Gregory Peters, is of the opinion that the new prices make the service still affordable and based on past experience, this change should also be accepted without any problems.
An offer that has captivated viewers
Behind the explosive growth in users is Netflix's varied selection. Among the series, the Korean Squid Game stood out in the quarter with 165 million views and Black Doves with 47 million. In movies, it was the thriller Carry-On (160 million) and the comedy Our Little Secret (84 million). Live broadcasts of sporting events are still relatively new for Netflix, but the move is paying off. In mid-November 2024, it screened Jake Paul's fight with boxing legend Mike Tyson, which went down as the most-watched ever. The boxing match between Katie Taylor and Amanda Serrano on the same night, in turn, was the most-watched professional women's sporting event in the US. NFL Christmas games also broke records. This is a direction Netflix is looking to continue this year, with new blockbuster series returning to the platform, including Wednesday, Stranger Things, the follow-up to Squid Game and the series finale of You. These will be complemented by films such as Frankenstein from director Guillermo del Toro, documentaries, sporting events and more.
The numbers reflected in the performance of the shares
Overall, Netflix's quarterly earnings results were remarkable. Revenues came in at $10.25 billion, up 16% year-over-year. Robust growth was seen in EPS, which rose 102% to $4.27 compared to 2023. In doing so, both figures beat the expectations of LSEG analysts, whose revenue forecasts were for $10.11 billion and $4.20 in EPS. Operating income increased 52% to $2.27 billion, with operating margin at 22.2%, compared to 17% in the prior year. Meanwhile, net income was $1.87 billion.
The great results also translated into movements on the NASDAQ stock exchange. Netflix shares rose sharply before the market opened, and maintained their gains after the market opened, reaching a new all-time high of $985 on January 22, 2025.* Year-over-year, this is an increase of a significant nearly 73%, and 167% from a 5-year perspective.*
Source: Investing.com*
Strong forecasts
As for the outlook, Netflix expects continued growth. In the first quarter of 2025, revenue could be up 11%, while operating margin could rise to 29%. For the full year, meanwhile, revenue is estimated to grow between 12% and 14% year-on-year, to between $43.5 billion and $44.5 billion. In addition, the company also announced a $15 billion share buyback plan. Netflix believes that streaming will continue to expand globally, and investing in the platform or subscriber plans will help it create a bigger and more valuable company for consumers and investors alike.[1]
Exclusive rights to women's football
Netflix's live streaming business has not only focused on combat sports and American football, but is further expanding its reach. A few days before Christmas, it announced that it had struck a deal with the soccer federation FIFA. Thanks to it, American users will be able to watch the matches of the FIFA Women's World Cup, which will take place in 2027 and 2031. This is an important step for Netflix, as it is the first competition for which it has acquired full broadcasting rights. In addition, to raise awareness of women's football, Netflix will also release a documentary covering both tournaments. According to FIFA President Gianni Infantini, this partnership is a historic moment for women's football.
Conclusion
The year 2024 was indeed a breakthrough year for Netflix. Record subscriber growth, remarkable economic results and expansion into live streaming confirm that the company is not only following trends, but actively creating them. With clear projections through 2025 that include continued growth and innovation, Netflix is firmly poised to continue shaping the future of the entertainment industry.
* Past data is not a guarantee of future returns.
[1] Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements are not guarantees of future performance. Forward-looking statements, by their nature, involve risk and uncertainty because they relate to future events and circumstances that cannot be predicted and actual developments and results may differ materially from those expressed or implied by any forward-looking statements.
Warning! This marketing material is not and should not be construed as investment advice. Past performance data is not a guarantee of future returns. Investing in foreign currency may affect returns due to fluctuations. All securities transactions may result in both gains and losses. Forward-looking statements represent assumptions and current expectations that may not be accurate or are based on the current economic environment, which may change. These statements are not guarantees of future performance. InvestingFox is a trademark of CAPITAL MARKETS, o.c.p., a.s. regulated by the National Bank of Slovakia.
Sources:
https://s22.q4cdn.com/959853165/files/doc_financials/2024/q4/FINAL-Q4-24-Shareholder-Letter.pdf
https://finance.yahoo.com/news/netflix-raises-u-subscriber-prices-032030420.html
https://www.cnbc.com/2025/01/21/netflix-nflx-earnings-q4-2024.html
