Netflix shares soar after subscriber growth blows away forecasts, company announces more price hikes

On By Littum

Netflix ( NFLX ) stock jumped over 14% in after-hours trading Tuesday after the streaming giant reported a whopping 18.9 million users in the fourth quarter, while revenue and earnings also exceeded expectations. It was the largest quarterly subscriber growth in the company’s history.

The company also announced a $15 billion share buyback and raised full-year revenue expectations. Netflix now projects 2025 revenue between $43.5 billion to $44.5 billion, ahead of the previous $43 billion to $44 billion range.

The strong subscriber gains come as the streamer finished 2024 with two back-to-back NFL games, a successful “Jake Paul vs. Mike Tyson” boxing match and the return of the “Squid Game.” To that end, the company said price increases will hit the service — which analysts had consistently teased going into print.

“We are adjusting prices today across most plans in the US, Canada, Portugal and Argentina,” the company said in the release.

The company is raising the price of its ad-supported plan to $7.99 from $6.99 previously. It’s Standard, ad-free tier will now be $17.99, up from $15.49, while its Premium plan will increase by $2 to $24.99. Users who want to add an additional member will now pay $8.99, an increase of $1.

Wall Street had expected the streaming giant to report just 9.18 million subscribers after it secured 13.12 million paying users in the fourth quarter of 2023. The company announced last spring that it would stop reporting the metric at the start of ​​this year.

On the earnings call, Netflix Co-CEO Greg Peters said the huge jump in subscribers was not driven by any particular event, despite its recent live sports programming.

“We’ve consistently seen throughout our history that no single title really drives the majority of our acquisitions or engagement,” Peters said, noting that live events accounted for a minority of new customers in the quarter.

In November, the Jake Paul and Mike Tyson fight attracted attention over 108 million global viewerswill be the most streamed sporting event of all time. For context, the 2024 Super Bowl, which was the most watched American telecast of all timeattracted 124 million US viewers.

Similar to the NFL games averaged about 30 million viewers. According to Netflix, it was its most watched Christmas Day ever in the US. The company will continue to double down on sports in the middle recent debut of WWE Raw. Rumors has also swirled the company could bid for UFC rights next.

Netflix said in its shareholder letter that it is not focused on rights to “major regular sports packages; rather, our live strategy is about delivering unmissable special event programming.”