Prime Highlights:
Netflix’s stock surged nearly 10%, closing at an all-time high of $954 following its strong Q4 earnings.
The company added 18.9 million new users in Q4, the largest quarterly increase in its history, surpassing Wall Street’s expectations.
Q4 revenue hit $10.25 billion (up 16% YoY), and EPS of $4.27 exceeded consensus estimates of $4.18.
Key Background:
Netflix’s stock surged to a historic high on Wednesday, climbing nearly 10% following the company’s impressive fourth-quarter earnings report and its optimistic outlook for 2025. The stock closed just under $954, marking a significant milestone for the streaming giant. Analysts lauded the results, with Jefferies’ James Heaney describing the quarter as “near flawless.”
The company reported an all-time high in quarterly subscriber growth, adding 18.9 million users in Q4, far exceeding Wall Street’s expectations. This surge helped boost revenue and earnings, which also outpaced analyst projections. Netflix’s revenue for Q4 reached $10.25 billion, a 16% year-over-year increase, and diluted earnings per share (EPS) came in at $4.27, surpassing expectations of $4.18. The company is projecting strong revenue for 2025, between $43.5 billion and $44.5 billion, slightly higher than prior forecasts.
In addition to subscriber growth, Netflix also unveiled a $15 billion stock buyback program and announced price hikes across its subscription plans. The ad-supported plan now costs $7.99, while the Standard and Premium tiers have seen price increases to $17.99 and $24.99, respectively. Netflix also reported strong growth in advertising revenue, which doubled in 2024 and is expected to continue its growth trajectory in 2025.
Key to Netflix’s success in Q4 was a series of high-profile live events, including NFL games, the highly watched Jake Paul vs. Mike Tyson boxing match, and the return of “Squid Game.” Although live events contributed to subscriber gains, Netflix emphasized that its overall growth was driven by a diverse range of content and initiatives.
With a forward-looking strategy focusing on special event programming and sports, Netflix remains confident in its position as a leading player in the competitive streaming market. Analysts have set new price targets, with Pivotal Research raising theirs to $1,250, reflecting continued optimism about the company’s future growth.
