Netflix gained a record 18.91 million subscribers in the fourth quarter, bringing its global total paid membership base to 301.6 million, up 15.9% year-on-year (YoY).
This marked a company record for the largest quarterly subscriber increase. The surge was driven by record-breaking viewership of Squid Game season 2 and the streaming giant’s recent live sports push, including the NFL and a historic boxing match between Mike Tyson and Jake Paul.
In the previous quarter (Q3), the company added 5m subscribers. The company’s earlier largest gain was in the first quarter of 2020, when it added 15m subscribers at the beginning of the COVID-19 pandemic.
However, moving forward, Netflix plans to stop providing quarterly updates on subscriber counts. Instead, the company will shift its focus to revenue, profit growth and audience engagement data, reporting subscriber numbers only when significant milestones are reached.
For the quarter, Netflix reported $10.2 billion in revenue, with an operating income of $2.3bn and a 22.2% margin. Operating income exceeded $10bn for the first time in its history.
For the entire year, Netflix’s revenue grew 16% to $39bn while operating profit exceeded $10bn for the first time. The company also added a record 41 million subscribers during the period.
The company projects revenue of $10.4bn in Q1 2025, with an operating income of $2.9bn.
Netflix’s numbers are poised to climb further as the company announced its first price hike in two years in the US, Canada, Portugal and Argentina in the upcoming weeks, including an increase for its ad-supported tier. The company continues to grow its advertising business, though it remains too small to be reported as a standalone segment in its earnings.
Live events are central to Netflix’s advertising strategy, and recent months have seen a significant focus on this area. The Jake Paul-Mike Tyson fight broke streaming records, while Netflix’s Christmas Day NFL games achieved viewership comparable to broadcast TV. Additionally, the company recently began streaming live episodes of WWE Raw weekly.
The quarter ending December 31 showcased a lineup of major events and releases.
“Our Q4 slate outperformed even our high expectations: 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,” the company said in its quarterly letter to shareholders.
Looking ahead to 2025 and beyond, Netflix said, “…we believe we account for less than 10% of TV viewing in every country in which we operate, all of which suggests a long runway for growth as streaming continues to expand around the world.”
Netflix plans to increase its content spending, expecting to allocate $18bn in 2025, up from $17bn in 2024.
It said that it needs to continue to improve all aspects of Netflix – more series and films, a great product experience, increased sophistication in its plans and pricing strategy (including more advertising capabilities) – and grow into new areas like live programming and games.
“Our business remains intensely competitive with many formidable competitors across traditional entertainment and big tech. We’re fortunate that we don’t have distractions like managing declining linear networks and, with our focus and continued investment, we have good and improving product/market fit around the world,” it said.
