Streaming giant Netflix flew past Wall Street’s estimates for its subscriber growth in its fourth-quarter earnings release after the bell on Tuesday, which sent the company’s stock surging into Wednesday’s trading day.
The company announced that it added 13.1 million subscribers in the fourth quarter, which easily exceeded projected gains of 8.97 million subscribers. Those gains gave Netflix its largest-ever fourth quarter subscriber growth and brought the total number of subscribers to 260 million.
Netflix’s subscriber growth came as the streaming platform aired the final season of the long-running royal drama "The Crown" as well as David Fincher’s original film, "The Killer."
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Netflix’s stock surged by 8.3% in after-hours trading and those gains continued into Wednesday’s trading session with the stock up nearly 11% as of late afternoon ET. The stock rose by 65% during 2023.
Revenue also rose to $8.8 billion, topping forecasts and the company’s guidance of $8.7 billion in the quarter. The revenue growth was up about 12.5% from the same period a year ago, in part due to gains stemming from its crackdown on password sharing and the addition of a subscription plan with advertising.
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Netflix said it expects double-digit revenue growth for full-year 2024 as it adds subscribers and invests in its advertising business. The company said that while advertising is not yet a primary driver of its revenue growth, it’s aiming for that to change by next year.
Netflix’s intellectual property helped drive its gains, including "Squid Game: The Challenge," a reality show based on its most-watched TV series, new original series such as "All the Light We Cannot See," as well as feature films like Zack Snyder’s "Rebel Moon: A Child of Fire," and non-English language programming like the third season of French series "Lupin."
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Going forward, Netflix said it sees growth opportunities from continuing to improve its programming slate and making inroads into new areas like advertising and games. Although the games business is still relatively new, Netflix said user engagement has tripled.
Reuters contributed to this report.
