Netflix added 18.9 million subscribers in its holiday quarter, blowing past Wall Street’s forecasts, with live sporting events and the return of its popular South Korean series “Squid Game” attracting a record number of new customers, the company reported Tuesday.
The streaming giant said that as it continues to invest in programming that its members value, it will increase prices for the service for most plans in the US, Canada, Portugal and Argentina.
In the US, the basic service with ads would increase by $1 a month to $7.99, a 14% price increase, while the premium package will cost $24.99, an increase of 9%.
Shares of Netflix surged about 10% in extended trade, lifting its stock market value by almost $40 billion.
Netflix said its fourth-quarter programming slate surpassed its internal expectations, with the Jake Paul vs. Mike Tyson boxing match becoming the most-streamed sporting event and the two National Football League games on Christmas Day delivering two of the most-streamed competitions in league history.
The service also benefited from the second season of its dystopian thriller “Squid Game,” which the company said is on track to become one of its most-watched original series.
The company has the lowest rate of cancellations among the subscription streaming services, with a churn rate of 1.8% in December, according to researcher Antenna.
This quarter will also mark the last time Netflix reports subscriber additions, as the company emphasizes other performance metrics including revenue and profit – a change analysts attribute to slowing subscriber growth.
The company reported per-share earnings of $4.27, beating Wall Street’s forecast of $4.20 per share, according to an average of projections from 34 analysts.
Annual operating income exceeded $10 billion for the first time in the company’s history.
Revenue rose 16% over the same time a year ago, to $10.2 billion, compared with Wall Street’s estimates of $10.1 billion for the quarter, according to LSEG.
“We enter 2025 with strong momentum,” Netflix said in its note to investors, saying it added a record 41 million subscribers in 2024 and re-accelerated growth.
The company revised its guidance, projecting revenue of $43.5 billion to $44.5 billion in 2025, an increase of a half-billion dollars over the prior forecast.
The updated guidance reflects improved business fundamentals, the company said.