Streaming juggernaut Netflix Inc NFLX disclosed its fourth-quarter financial performance post-market hours on Tuesday.
Revenue and Earnings
Netflix reported fourth-quarter revenue of $8.83 billion, marking a 12.5% year-over-year increase, surpassing the Street consensus estimate of $8.72 billion. The company reported fourth-quarter earnings per share of $2.11, missing the Street consensus estimate of $2.21.
Subscriber Growth
Netflix closed the fourth quarter with 260.28 million global paid members, a 12.8% year-over-year rise, and added 13.12 million net paid subscribers during the quarter.
Future Projections
The company’s outlook includes investments and expansions in its ad-supported platform, with an eye toward sustainable growth in revenue beyond 2025. Netflix expects a downtrend in paid net additions for the first quarter, but an increase compared to the 1.8 million paid net adds in the first quarter of fiscal 2023. Projected first-quarter revenue of $9.24 billion is a 13.2% year-over-year increase and nudges the anticipated analyst estimate of $9.3 billion. Earnings per share are guided to be $4.49 in the first quarter, surpassing the Street estimate of $4.10. Furthermore, Netflix upgraded its fiscal 2024 operating margin forecast from 22-23% to a new target of 24%.
Market Growth and Competition
Netflix expressed optimism about streaming’s future growth, forecasting further media sector consolidation. The company renounced interest in acquiring linear assets and belittled the prospective effect of additional mergers among traditional entertainment companies on the competitive landscape. Additionally, Netflix hinted at potential expansion opportunities including games, live and sports-adjacent programming, and other offerings, all anchored in its commitment to captivating members with entertainment.
Stock Movement
In after-hours trading, Netflix shares surged 6.38% to $523.57, compared to a 52-week trading range of $285.33 to $503.41, signifying a 38% increase over the past year.
