Netflix Q4 new user additions hit a record high, raising the new year outlook despite exchange rate disadvantages, up over 13% after hours | Earnings report insights
If the upward trend continues until tomorrow, it will create a new high for the stock price. In the fourth quarter of 2024 and for the whole year, there will be accelerated growth and improvement in operating profit margins, with record-breaking net additions of paying users in both the fourth quarter and the entire year. The annual operating profit will exceed 10 billion USD for the first time. Although the US dollar has strengthened, the revenue outlook for 2025 has still been raised by 500 million USD. Continuously updating
On January 21st, Tuesday after the US stock market closed, streaming giant Netflix released its fourth-quarter earnings for the fiscal year. Due to a significant increase in paid users that far exceeded expectations and an upward revision of its 2025 performance outlook, the stock price surged over 13% in after-hours trading. If this momentum continues into tomorrow, it will set a new all-time high for the stock price.
Here are the key points from Netflix's fourth-quarter earnings report for fiscal year 2024:
1) Key Financial Data
Revenue: Revenue for the quarter increased by 16% year-on-year to $10.25 billion, surpassing analysts' expectations of $10.11 billion, and grew by 19% year-on-year on a constant currency basis.
Profit: Net profit doubled year-on-year (up 99%) to $1.87 billion, operating profit increased by 52% year-on-year to $2.3 billion, with an operating margin of 22%, higher than 17% in the fourth quarter of 2023 and above the company's guidance.
Earnings per Share: Diluted earnings per share were $4.27, exceeding analysts' expectations of $4.20, compared to $2.11 in the fourth quarter of 2023.
Paid Users: The quarter saw a net addition of 19 million paid users, setting a new quarterly record, bringing the total number of members to over 300 million at 302 million by the end of 2024, exceeding analysts' expectations of 291 million. Including "additional member accounts," the global audience is estimated to exceed 700 million.
Cash Situation: The net cash generated from operating activities for the quarter was $1.5 billion, weaker than $1.7 billion in the same period last year; quarterly free cash flow (FCF) was $1.4 billion, weaker than $1.6 billion in the same period last year.
2) Performance Guidance
Revenue: It is expected that revenue for the first quarter of 2025 will grow by 11% year-on-year, or 14% on a constant currency basis; for the full year of 2025, revenue is expected to grow by 12% to 14% year-on-year, or 14% to 17% on a constant currency basis, with annual advertising revenue expected to roughly double.
Notably, the company expects revenue for 2025 to be between $43.5 billion and $44.5 billion, which is still an increase of $500 million from previous forecasts despite a strong dollar, indicating an accelerating growth momentum entering 2025.
Profit: The operating margin for 2025 is expected to be 29%, which is 1 percentage point higher than previous guidance and 2 percentage points higher than 2024.
3) Financial Data for 2024
Revenue: Annual revenue increased by 16% year-on-year to $39 billion.
Profit: Annual operating profit reached a record high, exceeding $10 billion for the first time, with an operating margin increasing by 6 percentage points to 27%
Paid Users: The net increase in users for the year reached a record high of 41 million.
Cash Situation: The net cash generated from operating activities for the year was $7.4 billion, slightly higher than the $7.3 billion in 2023, with total free cash flow for both 2023 and 2024 at $6.9 billion. Total debt at the end of the year was $15.7 billion, with net debt at $6.1 billion.
Shareholder Returns: In 2024, 9.9 million shares were repurchased, amounting to $6.2 billion, and a total of $12.9 billion has been used for stock repurchases since the plan was initiated. The board of directors approved an additional $15 billion for repurchases.
Continuously Updating