Netflix’s shares surged to a new high in after-hours trading, following the release of its fourth-quarter earnings report that far exceeded market expectations.
The streaming giant saw its shares rise more than 10% after reporting strong results for the quarter. A key driver of Netflix’s success was its live sports programming, including high-profile events like the Jake Paul vs Mike Tyson match, which fueled record-breaking user registrations. The company added 19 million new subscribers during the quarter, bringing its global user base to 302 million—doubling analyst expectations, largely due to its crackdown on password sharing.
However, this will be the last quarter in which Netflix reports subscriber numbers, as the company announced last year that it would shift its focus to more traditional metrics like profit margins and revenue growth. Netflix attributed its growth to a mix of hit content and special event programming, including Squid Game Season 2, Carry-On, and live sports events such as the Jake Paul vs Mike Tyson fight, NFL games, and the Beyoncé Bowl.
Additionally, Netflix secured US broadcasting rights for the 2027 and 2031 FIFA Women’s World Cup, further strengthening its focus on “must-see, special event programming.”
The ad-supported tier was another key growth driver, accounting for 55% of sign-ups in regions where ads are available. Membership in this tier grew nearly 30% sequentially. Netflix also emphasized that its top priority for 2025 would be to enhance its offering for advertisers, aiming to significantly increase advertising revenue.
“Netflix is becoming a one-stop shop for entertainment, delivering exceptional value to investors. Its ad-supported tier broadens its user base while attracting premium advertisers,” said Josh Gilbert, a market analyst at eToro.
Netflix’s total revenue increased by 16% year-on-year to $10.25 billion (€9.83 billion), surpassing analysts’ expectations of $10.11 billion (€9.7 billion). Earnings per share stood at $4.27 (€4.10), up from $2.11 (€2.02) in the same quarter last year. However, the operating margin dropped to 22%, the lowest in 2024, reflecting substantial investments in live sports programming.
For the full year, Netflix saw total revenue grow by 16%, while net income jumped by 62%. Regionally, Netflix’s US and Canada (UCAN) and Europe, Middle East, and Africa (EMEA) markets continued to be its largest revenue contributors, accounting for 44% and 32% of total sales, respectively. These regions reported year-on-year revenue growth of 4% and 1%.
Netflix plans to raise prices in markets including the US, Canada, Portugal, and Argentina to “reinvest in further improving Netflix.” The company also projected revenue of $43.5 billion (€41.7 billion) to $44.5 billion (€42.7 billion) for 2025, indicating an annual growth rate of 12% to 14%, higher than previous forecasts. It also raised its operating margin forecast to 29%, an increase of one percentage point, and expects free cash flow to reach $8 billion (€7.7 billion) in 2025, up from $7.4 billion (€7.1 billion) in 2024.
Netflix remains committed to expanding its core business with more series, films, and the continued development of live programming and gaming. The company is optimistic about the return of its flagship shows, including Squid Game, Wednesday, and Stranger Things, in 2025.
“If Netflix continues to deliver a compelling content lineup, it will justify further price increases, ensuring its growth trajectory remains strong,” added Gilbert.
