Author: Dawn Chmielewski
(Reuters) – Netflix (NASDAQ: ) added 18.9 million subscribers in its holiday quarter, beating Wall Street forecasts, with live sporting events and the return of the popular South Korean series “Squid Game” drawing a record number of new customers, the company said on Tuesday.
The streaming giant said that as it continues to invest in programming that its members value, it will increase the service’s prices for most plans in the US, Canada, Portugal and Argentina. In the US, the basic service with ads would go up $1 per month to $7.99, a 14 percent increase, while the premium package will cost $24.99, a 9 percent increase.
Shares of Netflix rose about 10% in extended trade, lifting its stock market value by nearly $40 billion.
Netflix said its fourth-quarter programming beat its internal expectations, with the Jake Paul-Mike Tyson boxing match becoming the most-watched sports event and two National Football League games on Christmas Day delivering the league’s two most-watched contests. history.
The service also benefited from the second season of its dystopian thriller “Squid Game,” which the company said is on track to become one of its most-watched original series. The company has the lowest cancellation rate among subscription streaming services, with a churn rate of 1.8% in December, according to researcher Antenna.
The quarter will also mark the last time Netflix reported subscriber growth, as the company emphasizes other performance metrics, including revenue and profit — a shift analysts attribute to slowing subscriber growth.
The company reported earnings per share of $4.27, beating Wall Street’s estimate of $4.20 per share, according to the average estimate of 34 analysts. Annual operating income exceeded $10 billion for the first time in the company’s history.
Revenue rose 16% year-over-year to $10.2 billion, compared with Wall Street estimates of $10.1 billion for the quarter, according to LSEG.
“We enter 2025 with strong momentum,” Netflix said in its note to investors, saying it added a record 41 million subscribers in 2024 and accelerated growth again.
The company revised its guidance, projecting revenue of $43.5 billion to $44.5 billion in 2025, an increase of half a billion dollars from its previous forecast. The updated guidance reflects improved business fundamentals, the company said.
