Streaming giant Netflix has just announced its performance results for Q4 2024. The company achieved a record growth with 18.9 million new subscribers, nearly doubling Wall Street’s expectations and surpassing the previous record of 15.8 million subscribers during the Covid-19 pandemic surge in 2020.
This will be the last time Netflix discloses subscriber numbers in its quarterly reports. The Wall Street Journal views this move as a sign that Netflix is shifting its focus in how it measures performance.
Q4 2024 marked a period when Netflix released several high-profile content, such as the second season of the record-breaking series Squid Game, two NFL games aired on Christmas Day, and a boxing match featuring the 58-year-old legend Mike Tyson. However, according to co-CEO Greg Peters, these shows only contributed a small part to the overall number of new subscribers.
Along with this extraordinary growth, Netflix has also decided to raise the prices of its subscription plans in the U.S. by an average of 13%. The standard, ad-free plan will increase from $15.50 to $18 per month, while the premium plan will rise from $23 to $25 per month. Even the ad-supported plan will see its first price hike, from $6.99 to $8 per month.
Netflix did not provide any detailed explanation for the price increase. The company simply stated, “We continue to invest in content and deliver more value to our members. As a result, from time to time, we will ask members to pay a modest fee to reinvest and improve the service.”
The news of the strong year-end growth and the price adjustment pushed Netflix’s stock price up by more than 14% in after-hours trading on January 21 (local time). The company’s market capitalization has now surpassed the combined total of major competitors like Disney, Comcast, Warner Bros. Discovery, and Paramount. Over the past 12 months, Netflix’s stock price has increased by more than 80%.
According to the Wall Street Journal, Netflix has been preparing to change how it reports business performance for some time. Instead of focusing on subscriber numbers, the company will now evaluate based on revenue and profit growth. This is especially important as its business model becomes more complex with the introduction of ad-supported services and account-sharing features.
This shift helps limit major market fluctuations. According to FactSet data, Netflix’s stock has experienced double-digit swings after 8 out of 16 recent quarterly reports.
This move also echoes Apple’s strategy in 2018. At that time, the tech giant stopped announcing the number of devices sold as the iPhone market reached saturation. With over 300 million global users, Netflix has far outpaced its industry competitors. Therefore, maintaining significant user growth in a single quarter has become increasingly difficult.
Data from Visible Alpha shows analysts expect Netflix to average 18.6 million new subscribers annually over the next three years, down from the 27 million per year average over the past five years.
The company’s 2025 revenue forecast has been raised, despite the strong U.S. dollar. Operating margin is expected to reach a record 29%, a gain of over 10 percentage points compared to five years ago.
