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Netflix added a robust 13mn subscribers in the fourth quarter as its crackdown on password sharing continued to result in more paying customers.
The subscriber figure was a record high for the fourth quarter and blew past Wall Street’s expectations of 8.8mn new subscribers, as viewers flocked to watch series such as The Crown and Sex Education.
Netflix said its operating income soared to $1.5bn in the quarter from $500mn a year earlier, thanks to higher revenue and “lower than planned” spending. But earnings per share of $2.11 fell short of Wall Street expectations of $2.15 — a shortfall it blamed in part on currency shifts.
The streaming pioneer ended the year with 12 per cent revenue growth. That represents a strong rebound from 2022 when it lost subscribers, shaking confidence in the streaming business.
The shares rose 7 per cent in after-hours trading.
Netflix struck an optimistic note in its letter to shareholders, in a sharp contrast to the sense of turmoil at many of the legacy Hollywood studios, which are suffering from the steep decline in linear television and losses from their streaming services. “As Netflix has shown, [streaming] can also be a very healthy business,” it said.
The company forecast “healthy double-digit” revenue growth for the full year. “We enter 2024 with good momentum,” Netflix said in the shareholder letter.
Netflix said it planned to build its advertising business this year and would work to improve the quality of its film and series offerings. It was also investing in live experiences.
Earlier on Tuesday Netflix said it had struck a 10-year, $5bn deal with World Wrestling Entertainment, a move that will push it further into the live streaming market.
