Why did Netflix's gross profit grow significantly in 2024?

Netflix's gross profit experienced a significant increase in 2024, growing from $14.01 billion in 2023 to $17.96 billion in 2024. This growth can be attributed to several key factors:

1. **Revenue Growth**: Netflix's revenue increased by 16% year-over-year, reaching $39 billion in 2024. This growth was driven by a 16% rise in annual revenue and the expansion of its operating margin, which grew by six percentage points to 27%.
2. **Operating Income Increase**: The operating income for the year was $10.4 billion, up from $7 billion in 2023. This increase, resulting in an operating margin of 27%, indicates improved efficiency in managing its core operations.
3. **Cost Management**: Netflix has effectively managed its cost of content, maintaining a gross profit margin above 39% for the year, which is a testament to its strong cost management practices.
4. **Strategic Investments**: The company's strategic focus on diversifying its content offerings and expanding into new markets has been a key driver of its success. These investments not only increase direct advertising revenue but also provide valuable data to improve content recommendations and ad targeting capabilities, potentially leading to higher engagement and retention rates across all tiers.

In summary, Netflix's gross profit growth in 2024 can be attributed to its successful revenue growth, increased operating income, effective cost management, and strategic investments in content and market expansion.

|code|Ticker|Name|Date|Gross Profit Margin|Operating Profit Margin|market_code|
|---|---|---|---|---|---|---|
|NFLX|NFLX.O|Netflix|2024 Q1|46.8854|26.244445298193043|185|
|NFLX|NFLX.O|Netflix|2024 Q2|46.3743|25.853859665341595|185|
|NFLX|NFLX.O|Netflix|2024 Q3|46.8914|26.495784844177006|185|
|NFLX|NFLX.O|Netflix|2024 Q4|46.0566|24.868309672124532|185|

|code|Ticker|Name|Date|Gross Profit|Operating Income|Total Revenue|market_code|
|---|---|---|---|---|---|---|---|
|NFLX|NFLX.O|Netflix|2024 Q1|4.393367E9|2.45922E9|9.37044E9|185|
|NFLX|NFLX.O|Netflix|2024 Q2|4.385167E9|2.434851E9|9.55931E9|185|
|NFLX|NFLX.O|Netflix|2024 Q3|4.704819E9|2.724647E9|9.824703E9|185|
|NFLX|NFLX.O|Netflix|2024 Q4|4.479149E9|2.080163E9|1.0246513E10|185|