Netflix shocked investors with its fourth-quarter results with subscriber gains of 19 million -- a whopping 10 million more than expected.
With a current total of 302 million global subscribers -- and 80 million in the U.S. -- Netflix stock soared in after-market trading, up 13% to $984.02. Quarterly revenue grew 16% to $10.2 billion.
The revenue increase is largely attributable to higher membership and advertising business gains. It is estimated that 49 million of its 302 million global subscribers are for its ad-supported service -- with around 20 million of the total in the U.S., according to Madison & Wall analysis.
Although Netflix had two major sports events in the fourth quarter -- with two NFL Christmas Day games and the Jake Paul vs Mike Tyson boxing match -- company executives point out that big subscriber gains were made because of its wide range of entertainment, sports, and other content -- including a new second season of “Squid Game.”
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During the fourth quarter, 55% of those new 19 million subscribers were for its ad-supported option -- up from 40% a year ago. Advertising-option subscribers were up 30% from the third quarter.
Amid strong interest in the big dominant premium streamer, Netflix will raise consumer prices.
Its ad option ‘Standard with Ads” will see a price rise to $7.99/month -- up from $6.99 a month. Its "Standard" no ads plans at $17.99 (from $15.49), while its "Premium" plan costs $24.99 (from $22.99) and extra membership is $8.99 (from $7.99).
Netflix’s yearly revenue was up 12% to $39 billion. The company expects 2025 revenue to go to $43.5 billion to $44.5 billion -- around a 12% to 15% growth rate.
For advertising brands buying into its growing ad-option, Netflix now has approximately 100 million total monthly active users (an average of two persons per household), according to Madison & Wall. Brian Wieser, principal at Madison & Wall guesses this was around 70 million in the third quarter 2024.
Netflix spent a bit less in the closely watched content spending in 2024 versus a year ago -- $16.2 billion versus $17 billion in 2023.
Company guidance estimates content spend will accelerate a bit -- to $18 billion.
As previously announced, Netflix will no longer disclose paid memberships, starting with its first-quarter 2025 earnings results.