Netflix on Tuesday beat Wall Street subscriber estimates in the fourth quarter, driven by strong shows including the final season of the long-running royal drama “The Crown” and David Fincher's original film “The Killer.” exceeded.
The company reported that it added 13.1 million subscribers in the December quarter, the largest increase in subscribers ever for a fourth quarter and far exceeding the expected increase of 8.97 million.
This brings the total number of subscribers to 260 million.
Netflix reported earnings of $2.11 per share, below consensus estimates of $2.22 per share.
The company announced that non-cash losses related to exchange rates of $239 million impacted earnings per share.
Revenue increased to $8.8 billion, exceeding expectations for the quarter and the company's own guidance of $8.7 billion.
Shares rose more than 5% in after-hours trading to $518.98.
The streaming giant said it expects healthy double-digit revenue growth for the full year of 2024 as it continues to add members and invest in its advertising business.
Netflix said advertising is not yet a major driver of revenue growth, but it aims to change that by 2025.
“It is becoming increasingly clear that Netflix is winning the 'streaming wars,'” wrote Jessica Lief Ehrlich, a media analyst at Bank of America.
The company benefits from the strength of its intellectual property, including the reality show “Squid Game: The Challenge,” based on the most-watched TV series, new original series such as “All the Light We Cannot See,” and feature films. is recognized. The same goes for non-English programs like Zack Snyder's Rebel Moon and the third season of French-based Lupine.
He also mentioned strong demand for licensed titles.
“Looking to the future, we have very bold plans for 2024, despite the postponement of some titles due to last year's strikes,” the company said.
According to Antenna Research, Netflix has the lowest monthly churn rate of any streaming service, with just 2% of subscribers canceling in December.
Media analyst John Hodulyk said he expected the company to continue to benefit from the crackdown on password sharing, which he expected would boost revenue by 5% in the quarter.
The crackdown is likely to fuel growth in Netflix's ad-supported segment, Ehrlich wrote.
The company recently announced that the ad-supported version of its service now has 23 million active users worldwide, up from 15 million in November.
Ehrlich said Netflix is also benefiting from changing market dynamics, forcing media companies to reevaluate their strategies for keeping movies and TV series exclusive to their streaming services.
She called it a “win-win” proposition, saying that these licensing deals would bring much-needed revenue to other media companies while allowing Netflix to reduce its investment in riskier original productions.
Earlier in the day, Netflix and TKO Group Holdings Transactions over $5 billion World Wrestling Entertainment's “Raw” and other programming will be available exclusively on the streaming service.
