Netflix Q4 - Record subscribers

It's my turn to write about Netflix's latest numbers and luckily for me, the company made my job easy. On Tuesday night, Netflix reported that they added 18.9 million subscribers in the final quarter of 2024, more than double the number Wall Street was expecting, and crossing 300 million subscribers. As a result, the stock popped 9.7%. Frustratingly, the new all-time high is now $999, just shy of a new milestone.

This is the last quarter that Netflix will report subscriber numbers as the company wants Wall Street to be more focused on their financial metrics. They are going out with a bang, as this quarter set the record for most additions. The previous record was 15 million at the height of Covid, when everyone was stuck at home needing entertainment.

The strong growth in their subscriber numbers can be attributed to a mix of things. They hosted some massive sporting events, such as the Mike Tyson vs. Jake Paul boxing match and the Christmas Day NFL games. Cracking down on password sharing is still paying dividends. Their cheaper ad-supported membership tier also made it easier for people to get stuck in.

Netflix increased their guidance for 2025. They are also increasing prices again for some major markets, including the US. For the standard plan in the US, the monthly price rises by $2.50 to $17.99, which is still super cheap and great value for money. Netflix is a money-making machine.

The stock is expensive on a forward P/E of 37. The market assumes that the company will not only hold onto its 300 million subscribers but add more, while continuing to increase subscription fees. Both those assumptions seem valid. Their biggest challenge is to keep creating interesting content to keep members from looking at competitor offerings.

Netflix is a good holding for more risk-tolerant clients. Buy them while they are still under $1,000 per share.