Netflix Q4 Earnings: Record Subscribers, NFL, 'Squid Game' Push Past 'Highest Expectations'
Tuesday, Jan 21, 2025 4:52 pm ET
1min read Netflix (NFLX) has once again shattered expectations with its Q4 2024 earnings report, delivering a record number of new subscribers and a surge in revenue driven by live events and popular content. The streaming giant added 18.9 million paid subscribers in the quarter, surpassing analyst estimates of 9.18 million and bringing its global total to 301.63 million.
The company's strong performance can be attributed to several factors, including its strategic shift towards live events and the release of highly anticipated content. In December 2024, Netflix streamed its first two NFL games, complete with a Beyoncé halftime show, which likely attracted sports fans and contributed to subscriber growth. Additionally, the release of "Squid Game" Season 2 on December 26, 2024, was a major draw for subscribers, as it was the platform's single largest piece of content in recorded history.
Netflix's ad tier, which launched in late 2022, has also played a significant role in its subscriber acquisition and retention. The ad tier accounted for over 55% of sign-ups in its ad countries during the fourth quarter of 2024, indicating that the lower-priced option is an attractive choice for new subscribers. Moreover, membership on the ad plan grew nearly 30% quarter over quarter, suggesting that subscribers are finding value in the ad-supported plan and are choosing to stick with it.
The company's pricing strategy has also contributed to its revenue growth and subscriber base. Netflix recently announced price increases in the U.S., Canada, Portugal, and Argentina, which are expected to further boost its revenue. The company's confidence in raising prices without triggering a mass backlash from subscribers is evident in its slightly raised revenue outlook for this year, with Netflix expecting its revenue to reach a mid-range of $44 billion, which would translate into a roughly 13% increase from last year.
In conclusion, Netflix's Q4 2024 earnings report demonstrates the company's continued dominance in the streaming industry, driven by its strategic shift towards live events, popular content, and a successful ad tier. The company's pricing strategy and subscriber growth indicate that Netflix is well-positioned to maintain its market leadership in the coming years.
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