Source-Protocol
In an impressive surge, Netflix witnessed a substantial uptick in its shares during after-hours trading on Tuesday following the release of its fourth-quarter report, which showcased robust subscriber growth. The streaming giant added a staggering 13.1 million subscribers during the quarter, surpassing Wall Street’s expectations and setting a new record with a total of 260.8 million paid subscribers.
Comparisons with the third quarter
This surge in subscriber numbers outpaced the 8.76 million additions reported in the third quarter, and it also exceeded Wall Street’s predictions, which ranged from 8 million to 9 million new subscribers. The company’s stock experienced a notable jump as investors responded positively to the news of the strong performance.
Financially, Netflix reported fourth-quarter net income of $937.8 million, or $2.11 per share, in stark contrast to the $55.3 million, or 12 cents per share, reported in the same period the previous year. The streaming giant posted a revenue of $8.83 billion for the quarter, marking a significant increase from $7.85 billion in the corresponding quarter of the previous year.
Aiming for the Profit Boost
As Netflix strategically focuses on bolstering profitability, the company has revised its 2024 full-year operating margin forecast to 24%, up from the previously projected range of 22% to 23%. This adjustment is attributed to a combination of factors, including a weaker U.S. dollar and a stronger-than-expected performance in the fourth quarter.
Looking ahead, Netflix anticipates earnings per share of $4.49 for the fiscal first quarter of 2024, surpassing Wall Street’s estimate of $4.10. The company’s proactive approach to increasing profitability and expanding its user base has positioned it as a standout performer in the highly competitive streaming market.
Further Investments in the Content Arena
In contrast to some rivals who have struggled to achieve profitability and have cut back on content spend, Netflix remains committed to investing in an extensive content slate. However, the company clarified in a shareholder letter that it won’t pursue acquisitions of traditional entertainment companies or linear assets, anticipating further consolidation in the industry.
Furthermore, Netflix disclosed plans to partner with content creators from the linear space. This move aligns with the company’s strategy to continually enhance its entertainment offerings, emphasizing that it will not waver in its commitment to investing in quality content.
In a noteworthy development, Netflix announced its largest foray into live entertainment by securing the streaming rights for WWE Raw starting next year. This move exemplifies Netflix’s dedication to diversifying its content and attracting a broader audience.
While advertising is not viewed as Netflix’s primary revenue driver in 2024, the company is making strides in its ad-supported plan. The platform now boasts more than 23 million global monthly active users, up from the 15 million reported just a few months ago. Despite not being the primary focus, Netflix is strategically positioning itself to scale its advertising business, exploring ways to make its ad tier more appealing to both viewers and advertisers.
