Netflix’s sales increased to $8.83 billion over the last year, the firm announced on Tuesday. The impressive total exceeded Wall Street’s forecast of 8.91 million and outperformed expectations in every region of the world, with Netflix adding more than 5 million users in Europe, the Middle East, and Africa.
In Q4 2023, Netflix signed up 13.1 million users, marking the company’s highest quarterly increase since the pandemic.
It also rebounded from a difficult 2022 by achieving one of its strongest years of customer growth, aided by a crackdown on password sharing, the launch of a less expensive advertising-supported service, and a solid slate of programs.
Netflix’s top shows in the most recent quarter included the post-apocalyptic drama Leave the World Behind and a documentary about soccer great David Beckham.
The company’s robust success contrasts sharply with many of its Hollywood competitors, who manage dwindling cable networks and unprofitable streaming businesses.
To stay competitive, some corporations are combining and slashing jobs.
As a result, its stock climbed as high as 8.9 percent to US$535.91 in extended trade following the earnings report.
They are up 38% in the last year through the close in New York.
Just a few years ago, it appeared like Netflix’s growth had peaked after losing users in the first half of 2022. However, the steps done since then have paid off.
“We believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” the company said in a letter to shareholders.
Earlier last month, the business announced that the tier is currently used by over 23 million users. Greg Peters, co-CEO, stated on Tuesday that the company still has a lot of work to do to improve its advertising business.
The company needs to expand its consumer base, launch new goods, and upgrade its technology. Management believes Netflix has the potential to collect billions of dollars from linear TV networks.
“We got hundreds of millions of qualified households out there that are still yet to sign up for Netflix,” Peters said on a conference call with investors. “I can’t believe it, but they are there and we’ve got to win them over.”
In the same line, the firm announced on Tuesday a 10-year agreement to provide weekly live content from World Wrestling Entertainment beginning in 2025.
Ted Sarandos, co-CEO, defined WWE as sports entertainment and stated that the transaction does not indicate the company’s interest in sports rights, at least not now.
WWE has a massive, intergenerational fan base that will expand on Netflix, particularly internationally, he said.
Netflix still earns the majority of its revenue from individuals who pay to view movies and TV series on demand, but it has begun to invest in live programming and video games.
Despite Peters’ optimistic outlook, the strong year-end subscription increase may not continue into 2024.
Netflix said it will not gain as many users in the first quarter of 2024 as it did in the final months of 2023, but the total will be higher than the previous year’s 1.75 million.
Wall Street anticipates that Netflix will attract 4.31 million new users in the quarter.
However, this will not have a negative impact on revenue. Netflix announced that it will continue to increase revenue at a double-digit rate, in part by hiking pricing, as it did for many years.
Fourth-quarter earnings increased to US$2.11 per share, falling short of Wall Street expectations.
Netflix earned a net income of $5.41 billion last year and ended 2023 with $7 billion in cash and short-term assets.