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Netflix (NFLX, Financial) stock tacked on an additional 14% to vault higher in after-hours trading after a strong fourth-quarter report easily beat expectations on Wall Street. Strong performance in the U.S./Canada, Asia Pacific and Latin America drove the streaming giant's addition of a record 18.91 million net subscribers, up 44% year over year.
Fourth-quarter revenue for 2024 was $10.2 billion, a 16% year-over-year increase, slightly surpassing estimates of $10.19 billion, while earnings per share of $4.27 compared favourably with a consensus of $4.20. Netflix board OKs $15 billion in stock buybacks as a show of faith in its financial health and long-term strategy.
The popularity of the company enabled it to exploit its popularity by increasing prices in the already key market of the U.S., as well as in Canada, Portugal, and Argentina. The ad-supported tier now costs $7.99/month in the U.S., and the premium plan rose 9% to $24.99. Analysts say Netflix's stronger content slate suggests its move is a reflection of its rivals.
Viewer engagement saw a boost from original programming, including the return of Stranger Things, Wednesday, and Squid Game's second season. Millions of streams were pulled in by live events, such as NFL games with Beyonce and high-profile boxing matches, as Netflix ramped up its real-time programming push.
In 2024, advertising revenue grew by double, and the revenue is poised to balloon this year to $2 billion off of the popularity of the ad-supported tier. As its growth matures, Netflix plans to start reporting on its financial performance rather than the number of subscribers it gains or loses.
As it sticks with its revised 2025 revenue projection of $43.5$44.5 billion, which makes things official, Netflix is a streaming industry leader.
This article first appeared on GuruFocus.