Netflix reports record-breaking quarterly results as shares soar

Netflix shares soared more than 10% in the extended hours to a record high amid strong fourth-quarter earnings.

The US-based streaming tech giant benefited from its live sports programming such as the match between Jake Paul and Mike Tyson, driving record-breaking user registrations.

The company added 19 million new subscribers during the quarter, bringing its global users to 302 million. The quarterly user addition doubled analyst estimates, boosted by its crackdown on password sharing.

However, it is the last quarter in which Netflix reports the number of subscriptions as informed by the company last year, shifting its focus to more traditional metrics such as profit margin and revenue growth. 

Business highlights

Netflix attributed its strong growth to a combination of hit content and special event programming.

Highlights included Squid Game Season 2, Carry-On, and live sports such as the Jake Paul vs Mike Tyson fight, NFL games, and Beyoncé Bowl.

Additionally, the company has secured US broadcasting rights for the FIFA Women’s World Cup in 2027 and 2031, underscoring its commitment to "can’t-miss, special event programming."

The ad-supported tier was a key driver of user growth during the quarter, accounting for 55% of sign-ups in countries where ads are available.

Membership in this tier rose nearly 30% sequentially. “A top priority in 2025 is to enhance our offering for advertisers, enabling substantial growth in advertising revenue,” Netflix stated.

“Netflix is becoming a one-stop shop for entertainment, delivering exceptional value to investors. Its ad-supported tier broadens its user base while attracting premium advertisers,” said Josh Gilbert, a market analyst at eToro.

The strongest-ever quarter

Netflix’s total revenue increased by 16% year-on-year to $10.25bn (€9.83bn), surpassing analysts’ expectations of $10.11bn (€9.7bn). Earnings per share stood at $4.27 (€4.10), compared to $2.11 (€2.02) in the same quarter the previous year.

However, the operating margin dropped to 22%, the lowest in 2024, reflecting significant investments in live sports programming.

For the full year, total revenue grew by 16%, while net income jumped 62%.

Regionally, the UCAN (US and Canada) and EMEA (Europe, Middle East, and Africa) markets remained Netflix’s largest revenue contributors, accounting for 44% and 32% of total sales, respectively.

These regions reported year-on-year revenue growth of 4% and 1%. Netflix plans to raise prices in markets including the US, Canada, Portugal, and Argentina to “reinvest in further improving Netflix.”

The company projected revenue of $43.5bn (€41.7bn) to $44.5bn (€42.7bn) in 2025, representing an annual growth rate of 12% to 14%, higher than previous forecasts.

It also upgraded its operating margin forecast to 29%, up by one percentage point. Free cash flow is expected to reach $8 billion (€7.7bn) in 2025, up from $7.4bn (€7.1bn) in 2024.

Netflix emphasised its commitment to its core business, with plans for more series, films, and further development of live programming and gaming.

The company is optimistic about the return of its flagship shows, such as Squid Game, Wednesday, and Stranger Things, in 2025.

“If Netflix continues to deliver a compelling content lineup, it will justify further price increases, ensuring its growth trajectory remains strong,” Gilbert added.