Netflix raises prices as it gains record subscribers in Q4
What's the story
Netflix has announced a price increase following a record-breaking quarter, adding 18.9 million new subscribers in Q4 2024. This surpasses the 13 million added the previous year.
For the entire year, the streaming giant added 41 million new users, also a record.
This surge has pushed the company's total subscriber count to a total of 302 million globally.
Investors reacted positively, driving Netflix's stock price up by over 14% to $993 in after-market trading.
Financials
Netflix's Q4 2024 financial performance and future plans
For the fourth quarter of 2024, Netflix posted a profit of $1.87 billion and revenue of $10.25 billion, reflecting double-digit growth over the same period last year.
The company will hike subscription prices in multiple countries such as Argentina, Canada, Portugal, and the US.
In a letter to investors, Netflix executives said, "We enter 2025 with strong momentum, coming off a year with record net additions — 41 million — and having re-accelerated growth."
Strategy
Netflix's new pricing and future strategy
The price hike will raise the ad-supported tier from $6.99 to $7.99/month and the standard ad-free tier from $15.49 to $17.99/month in the US.
The premium tier will also increase from $22.99 to $24.99/month, effective during subscribers' next billing cycle.
Netflix plans to expand its advertising capabilities and offer more live shows and games in 2025, as part of its growth strategy.
Expansion
Netflix's new Extra Member with ads plan
Netflix is also bringing an 'Extra Member with Ads' plan, letting those on the ad-supported plan add someone outside their household to their subscription.
The move comes after the company revealed that over 55% of signups in countries where they are offered, were for its ad-supported plans.
The plans have witnessed nearly 30% growth overall from the previous quarter, highlighting strong consumer preference for the model.
Forecast
Netflix's 2025 revenue forecast and content highlights
Netflix projects its 2025 revenue to be between $43.5 billion and $44.5 billion, with an ambitious target of a healthy 29% operating margin.
The streaming service also teased new seasons of popular shows like "Wednesday," and "Stranger Things," as part of its upcoming content lineup.
US viewers can also look forward to a year-long WWE professional wrestling programming and the return of NFL games on Christmas Day.