Popular original series such as the “Squid Game” and live sports such as the Jake Paul versus Mike Tyson fight helped Netflix cross the threshold of 300 million subscribers and report record revenues and operating income. The company’s stock jumped to new highs, adding hype to the tech sector during the regular trading session on Jan. 22.
Higher subscription growth helped push operating income for the quarter to about $2.3 billion, a 52 percent increase, with an operating margin of 22.2 percent, up from 16.9 percent last year. In addition, the company plans to return an additional $15 billion to stockholders through share buybacks and gave a rosy revenue forecast for 2025.
“Our fourth-quarter slate outperformed even our high expectations,” the company said in a letter to stockholders: “Squid Game season 2 is on track to become one of our most watched original series seasons, Carry-On joined our all-time Top 10 films list, the Jake Paul vs. Mike Tyson fight became the most-streamed sporting event ever, and on Christmas Day we delivered the two most-streamed NFL games in history,”
This original content follows the introduction of a wave of new shows in the third quarter, such as “The Perfect Couple,” “Nobody Wants This,” and “Tokyo Swindlers.” It also marks the return of popular programming, such as “Emily in Paris” and “Cobra,” and an expansion into documentaries and small programming.
These shows helped keep viewers “engaged,” a metric Netflix uses to measure member happiness with the platform. Viewing hours rose throughout 2024.
“We want to be the first place members go for entertainment—whatever your taste or mood, and whomever you are watching with,” the company said. “Engagement underpins that goal, as we believe it is the best proxy for customer satisfaction, which leads to higher retention, acquisition, and value for our service.”
Meanwhile, the expansion of content offerings allowed Netflix to hike prices last year by $2 per month for its Basic plan and by $3 for its Premium plan, the second price hike since January 2022.
Paul Carlson, a CPA and managing partner of law firm Velocity, liked what he saw in Netflix’s subscription numbers and financials.
“Netflix dropped some pretty impressive numbers,” he told The Epoch Times via email. “They’re still the top dog in streaming.”
Carlson likes the company’s strategy for the future, which includes additional price hikes across most subscription tiers in the United States, Canada, and other markets.
“They’re bumping up the cost of most subscription tiers, like the standard ad-free plan going to $17.99 monthly,” he said. “The big draw seems to be their content strategy. There’s more focus on quality content and live sports, which could set them apart from competitors like Disney+ or Amazon Prime.”
In addition, Carlson welcomed the company’s focus on the ad-supported model with improved offerings for advertisers.
“With many accounts switching to this tier without much churn, it shows they’re finding ways to monetize their audience effectively without losing subscribers. It’s a balancing act, but they seem to be pulling it off,” he said.
