Netflix’s Blockbuster Q4 🎦
Netflix is kicking off the year on a high note after an impressive fourth-quarter earnings report that smashed expectations. The streaming giant not only topped analyst forecasts for revenue and profit but also delivered a record-breaking 18.91 million net subscriber additions—more than double the 9.18 million predicted.
User Growth: The Star of the Show
Subscriber growth was the standout, soaring 44% year-over-year, with the U.S./Canada region seeing a 72% jump (4.82 million new users), far surpassing expectations. Growth was equally impressive in Asia Pacific (up 70%) and Latin America (up 77%), while Europe, the Middle East, and Africa added 5 million users.
Netflix credited its success to a robust content slate, regional market improvements, and Q4 seasonality. Hits like Squid Game’s new season and major live events, including the Mike Tyson/Jake Paul boxing match and NFL Christmas Day games, helped drive sign-ups.
However, Netflix announced it will no longer report quarterly subscriber numbers moving forward, signalling a shift toward focusing on revenue and profits.
Margins and Monetisation
Netflix’s operating margin hit 22.2% for the quarter, up from 16.9% a year ago, and the company expects to reach 28.2% in Q1 2025. The ad-supported tier continued to shine, contributing 55% of sign-ups in markets where it’s available, with overall membership for the plan growing 30% from the previous quarter.
To build on this momentum, Netflix is rolling out an Extra Member with Ads plan in 10 additional countries and expanding its first-party ad-tech platform in Canada.
Price Hikes and Confidence
Netflix also announced price increases in the U.S., Canada, Portugal, and Argentina, citing the need to reinvest in programming. Analysts like Max Greve see this as a vote of confidence in Netflix’s strategy, which increasingly centres on Paid Sharing and Advertising.
A Home Run with a Clear Horizon
Analysts agree Netflix nailed it this quarter. Seeking Alpha’s Max Greve summed it up: "It’s hard to find any clouds on the horizon with a report like this." While questions linger about how sports programming might impact the broader content lineup, Netflix’s proven track record and strong execution have earned it the market’s trust—and the stock’s after-hours jump reflects that.
Netflix may have stopped reporting subscriber numbers, but with results like these, they’ve got plenty to talk about.