Netflix has exceeded Wall Street expectations for its fourth-quarter subscriber growth, achieving 13.1 million subscribers, which marks the streaming giant’s largest-ever fourth-quarter subscriber growth and brings its total subscriber base to 260 million.
Despite falling short of consensus estimates for per-share earnings, with the streaming service reporting $2.11 compared to the expected $2.22 per share, Netflix saw its shares surge by 8.3% in after-hours trading. The company attributed the per-share earnings dip to a $239 million non-cash loss related to currency exchange rates. However, its revenue reached $8.8 billion, surpassing forecasts and its own guidance of $8.7 billion for the quarter.
Netflix’s success in the final quarter of 2023 was driven by a compelling lineup of shows and original content. Notable contributors to this growth included the final season of the long-running royal drama The Crown, the reality show Squid Game: The Challenge, and the French series Lupin, among others.
The company sees its strength in intellectual property, with shows like Young Sheldon contributing to its success. Co-CEO Ted Sarandos expressed enthusiasm about Netflix’s engagement with studios for licensing deals, indicating a “win-win” proposition that allows the streaming service to reduce its investment in higher-risk original production while providing other media companies with valuable revenue.
Netflix’s optimistic outlook extends to its plans for 2024, with expectations of healthy double-digit revenue growth. The company aims to continue adding members and investing in its advertising business. While advertising currently is not a primary driver of revenue growth, Netflix aims to change that by 2025.
Chief Financial Officer Spencer Neumann also shared insights into Netflix’s plans to increase spending on content after 2023’s dual Hollywood strikes. He anticipates the company will invest as much as $17 billion this year.
Working towards that, Netflix recently announced a deal of over $5 billion with TKO Group Holdings to exclusively bring World Wrestling Entertainment’s Raw and other programs to the streaming service in January 2025.