Netflix stock soared 14% in after-hour session on Tuesday to $994.80 per share following a record-breaking addition of 18.9 million subscribers in the fourth quarter. In response to the strong earnings, the company announced a $15 billion stock buyback and raised its 2025 revenue forecast to between $43.5 billion and $44.5 billion.
The subscriber surge was driven by two consecutive NFL games, the Jake Paul vs. Mike Tyson boxing match, and the return of Squid Game. In response to these earnings, Netflix announced price increases in the US, Canada, Portugal, and Argentina.
The ad-supported plan will increase by $1 to $7.99, the Standard ad-free tier by $2.50 to $17.99, the Premium plan by $2 to $24.99, and adding an extra member will cost $1 more, reaching $8.99.
The company’s co-CEO, Greg Peters, stated that the subscribers’ surge was not driven by any single event, highlighting that live events contributed to only a minority of new customers acquired during the quarter.
Still, these sports matches were considered extremely famous. Jake Paul and Mike Tyson’s match, known as the most streamed sporting event of all time, attracted 108 million viewers, while NFL games during the Christmas Day attracted an average of 30 million viewers.
Netflix promises to continue investing in sports but will not focus on the regular season. Instead, the company will deliver only special event programs that subscribers cannot afford to miss.
In 4Q24, Netflix generated $10.25 billion in revenue, a 16% year-over-year increase, surpassing Bloomberg’s estimate. However, for 1Q25, Netflix projected $10.42 billion, slightly missing consensus estimates by $60 million.
Moreover, the company also reported a diluted earnings per share (EPS) of $4.27 in 4Q24, beating estimates of $4.18 and significantly outperforming last year’s $2.11. However, Netflix forecasted a 1Q25 EPS of $5.58, which fell short of the $6.01 consensus estimate.
In terms of operating margins, the company recorded 22.2% for 4Q24 and 27% for the full year, with expectations to reach 28.2% in 1Q25, though analysts had forecasted margins to hit 30%.
