Updated January 24th, 2024 at 08:50 IST
Netflix surpasses Q4 subscriber expectations with record growth
The company's stock saw an 8.3 per cent surge in after-hours trading, capping off a year in which it gained an impressive 65 per cent.
Netflix outperformed Wall Street forecasts for its fourth-quarter subscriber count, showcasing a substantial increase of 13.1 million subscribers, a record-breaking achievement for the streaming giant. The surge, driven by hit shows like the final season of "The Crown" and David Fincher's original film, "The Killer," propelled Netflix's total subscriber base to an impressive 260 million.
Despite missing consensus estimates for per-share earnings, citing a $239 million noncash loss related to currency exchange rates, Netflix's robust revenue of $8.8 billion surpassed both forecasts and the company's own guidance of $8.7 billion for the quarter. The company's stock saw an 8.3 per cent surge in after-hours trading, capping off a year in which it gained an impressive 65 per cent.
Analysts, including Bank of America's Jessica Reif Ehrlich, noted that Netflix's dominance in the streaming space is increasingly evident, with the company now perceived as the victor in the 'streaming wars.' Netflix attributes its success to a strong portfolio of intellectual property, including reality show "Squid Game: The Challenge" and new originals like "All the Light We Cannot See," as well as strategic investments in non-English-language programming.
Looking ahead, Netflix expresses optimism for double-digit revenue growth in 2024, driven by continued subscriber additions and investments in its advertising business. While advertising is not currently a primary revenue driver, Netflix aims to change that by 2025.
The company's strategic moves extend beyond content, with plans to venture into live programming evident in a $5 billion deal with TKO Group Holdings to bring World Wrestling Entertainment's "Raw" exclusively to Netflix in January 2025. This move signifies Netflix's evolving content strategy and diversification into live programming.
Chief Financial Officer Spencer Neumann emphasized the company's commitment to smart and responsible content spending, anticipating an investment of up to $17 billion in 2024. The foray into live programming, highlighted by the WWE deal, underscores Netflix's adaptability and determination to explore new avenues for growth.
(With Reuters inputs)
Published January 24th, 2024 at 08:50 IST