Netflix Shares Rise on Price Hikes and Historic Subscriber Growth

Netflix reinforced its dominance in the streaming video market on Tuesday, as its mix of live sporting events, popular returning shows, and unique moments, such as Beyonce's football halftime performance, helped draw a record number of members during the holiday quarter.

In the fourth quarter, the business attracted 18.9 million users, bringing its total global subscriber base to roughly 302 million customers, far outnumbering its Hollywood streaming rivals.

Investors reacted positively to the data, driving Netflix's shares up around 13% in extended trading and increasing its market value by nearly $50 billion. Over the last year, Netflix shares have increased by more than 77%, beating the S&P 500's 24% increase.

"Netflix reaffirms its leadership position and is absolutely running away with the streaming market," said Paolo Pescatore of PP Foresight. "It is now flexing its muscles by adjusting prices given its far stronger and diversified programming slate compared to rivals." The business stated that its fourth-quarter programming schedule exceeded its own expectations, with viewers bingeing on the second season of its dystopian survival drama "Squid Game," which is on course to become one of its most-watched original programs.

Netflix's increased spending in live-streamed events is attracting tens of millions of viewers. The heavyweight boxing battle between Jake Paul and Mike Tyson in November received 65 million views. The two National Football League games on Christmas Day, one of which featured Beyonce's halftime performance, attracted an average of 30 million global viewers, making them among the most-streamed matches in league history.

It will also air additional live events, including as weekly episodes of WWE's "Monday Night Raw" wrestling. It has obtained the rights to the FIFA Women's World Cup in 2027 and 2031, a deal that it says demonstrates its approach of delivering special-event content rather than regular-season sports packages.

The company stated that the ad-supported version of its service accounted for 55% of new sign-ups in countries where it is available.

According to Macquarie Equity Research analyst Tim Nollen, ad income will reach $2 billion this year as more individuals subscribe to the company's advertising-supported tier and Netflix's advertising technology evolves. Live events will continue to drive sign-ups, he stated in an investment letter issued before Netflix's earnings release.

This quarter will also be the last time Netflix announces subscriber increases, as the firm focuses on other performance metrics such as revenue and profit, which analysts link to slower subscriber growth.

The firm announced earnings per share of $4.27, exceeding Wall Street's forecast of $4.20 per share, based on an average of 34 analyst projections. The company's annual operating profits exceeded $10 billion for the first time in its history.