Netflix Inc (NASDAQ:NFLX) shares are heading for a near-9% gain on Wednesday after the video streamer’s fourth-quarter growth in subscribers and revenues exceeded expectations, with a bullish outlook for 2024.
Revenue of $8.83 billion topped Wall Street analyst expectations of $8.72 billion. This year-over-year growth of 13.2% was attributed to Netflix’s paid-sharing model, recent price changes, and its strong content slate.
Earnings per share (EPS) of $2.11, however, missed expectations of $2.20 and included a $239 million non-cash unrealized loss from currency swings on the company’s euro-dominated debt.
Netflix added 13.1 million new subscribers during the quarter with its number of paid memberships reaching $260.3 million, up 12.8% year-over-year and beating the streamer’s forecast of about 9 million additions.
For the current quarter, 1Q, Netflix guided EPS of $4.49 on revenue of $9.24 billion, ahead of EPS estimates of $4 but slightly below the consensus revenue forecast of $9.28 billion.
“We expect healthy double-digit revenue growth for the full year 2024 on a F/X neutral basis driven by continued membership growth as well as improvement in F/X neutral average revenue per member (ARM) as we adjust prices,” the company wrote in a letter to shareholders accompanying its results.
“We’ll also continue to invest in and build our ads business; we expect strong growth in 2024 but off a small base so it’s not yet a primary driver of our overall revenue growth.”
Netflix shares gained 7.2% at US$527.40 shortly following the release of its earnings report.
Subscriber growth "smashed it out of the park", said Kyle Rodda, senior market analyst at Capital.com.
"The result was the strongest since the stay-at-home boom at the start of the pandemic and shows the company’s successful execution of its new pricing and product segmentation strategy."