- Netflix added record 19 million subscribers
- Shares set to surpass $1,000 for the first time
- Live sports proving a winner
Shares in Netflix (NFLX:NASDAQ) soared more than 14% to $997 in after hours trading on 21 January after the global streaming giant revealed it added a record 19 million new subscribers in the fourth quarter.
That meant the company finished 2024 with 302 million subscribers, up 15% and ahead of Wall Street estimates.
The company announced price hikes in the US, Canada, Portugal, and Argentina. In the US a monthly subscription will rise by $2.50 a month to $17.99 for its most popular plan.
Netflix also raised its revenue guidance for 2025 to between $43.5 billion and $44.5 billion, which was $500 million higher than the company’s previous forecast.
SQUID GAME AND NFL HIGHLIGHTS
Fourth quarter highlights for the streaming giant included record viewing numbers for the Mike Tyson versus Jake Paul fight and two National Football League games on Christmas Day.
Drama-wise, season two of Squid Game struck a chord with global audiences attracting 165.7 million views, with the company saying it is ‘on track to become one of our most watched original series seasons.’
Another series title which proved popular with audiences included Senna with 16.2 million views, One Hundred Years of Solitude with 11.2 million views and Black Doves with 46.8 million views.
EXPERT VIEWS
Ben Barringer, technology analyst at Quilter Cheviot said: ‘A strong driver of this growth has been its focus on under-penetrated markets, where the potential for expansion remains vast. The ad-supported tier has also shown exceptional momentum, doubling in size in 2024 and again in 2025. This growth not only brings in new subscribers but also provides a robust revenue stream, complementing their core business model.
The company has effectively navigated challenges such as foreign exchange headwinds, which are significant given that 60% of its revenue is generated outside the US. Despite this, margins have improved, reflecting operational efficiencies. The outlook for 2025 has been slightly raised, with revenue expected to grow by 12–14% in dollar terms, a notable achievement in the current economic climate.
DIVERSIFIED CONTENT
Dan Coatsworth, investment analyst at AJ Bell said: ‘Overall, this is an excellent set of results for Netflix, showcasing not just its ability to grow but to do so sustainably. With improving margins, a growing ad tier, and a strong global footprint, Netflix continues to cement its position as the leader in the streaming space.’
‘Netflix has been spreading its wings to offer more diversified content. Sports and games now comfortably sit alongside films and TV shows, making Netflix a broader entertainment hub. It means there is something for everyone and the company clearly feels this is worth a higher monthly subscription price.
‘Sports rights can be incredibly expensive, and it makes sense that Netflix has opted to go with special events rather than full season sport packages. There is often a buzz around special events which should help to drive up audience numbers, particularly if everyone is talking about a certain game at work or among friends. It’s a clever move as it means Netflix can be selective with the games for which it wants to obtain the rights, thereby keeping greater control over spending.
‘Recent boxing and NFL events proved to be a big win for Netflix, entertaining viewers and offering something else in its sales pitch to keep enticing more people to subscribe. Such sporting events are also perfect for attracting advertisers keen to reach a large audience, and this is now a key source of income for the company.’
LEARN MORE ABOUT NETFLIX
DISCLAIMER: Financial services company AJ Bell referenced in this article owns Shares magazine. The author of this article (Sabuhi Gard) and the editor (Martin Gamble) own shares in AJ Bell.
