302M subscribers and record profitability: Netflix redefines streaming leadership

ByInvestment Club

Overview

After the market closed on January 21st, Netflix achieved strong financial and operational performance in Q4 2024 and the full year, driven by significant growth in revenue, operating income, and global memberships. Immediately after the market closed (11:00 PM in Romania), Netflix shares were even trading over 13% above the closing price.

In 2024, Netflix achieved record growth, with revenue reaching $39bn and operating income surpassing $10bn for the first time, with an operating margin of 27%. The company ended the year with 302m memberships, adding 19m paid subscribers in Q4 alone.

Netflix’s Q4 slate outperformed expectations with hits like Squid Game Season 2, the film Carry-On, and groundbreaking live events, including the Jake Paul vs. Mike Tyson fight, now the most-streamed sporting event in history.

Q4 2024 vs. Q4 2023:

  • Revenue increased to $10.25bn (+16% YoY), helped by 19m paid net adds.
  • Operating income rose to $2.27bn (+52% YoY), with an operating margin of 22% (up from 17% in 2023).
  • Net Income doubled compared to the same period in 2023, reaching a value of $1.87bn (+99% YoY).
  • Diluted EPS followed the same trend, reaching a value of $4.27 (compared to $2.11 in Q4 2023), more than doubling YoY.
  • Global Paid Memberships reached 302m, with 19m net additions in Q4 (the largest quarterly growth in Netflix’s history).

Full-Year 2024 highlights:

  • Revenues for the full-year increased to $39bn (+16% vs. 2023), supported by a strong content slate and expanded ad-supported memberships.
  • Operating income reached a value of $10.42bn (+50% YoY), achieving a record operating margin of 27%.
  • Net Income recorded a value of $8.71bn (+61% vs. 2023), demonstrating sustained growth in profitability.
  • Basic EPS increased to $20.28, up from $12.25 in 2023 (+65% YoY), highlighting the company’s strong profitability and effective cost management.
  • Free Cash Flow was $6.92bn, consistent with 2023, highlighting strong cash generation.

For Q1 2025, Netflix projects revenue of $10.42bn, with a year-over-year growth rate of 11.2%. Operating income is expected to reach $2.94bn, reflecting an operating margin of 28.2%, a significant improvement compared to Q4 2024. Diluted EPS is forecasted at $5.58, highlighting continued growth in profitability and operational efficiency as the company builds on its momentum from 2024.

For the full-year 2025, Netflix forecasts revenue in the range of $43.5bn to $44.5bn, reflecting a $0.5bn increase from prior estimates, despite the strengthening of the US dollar. The company expects an operating margin of 29%, approximately one percentage point higher than in 2024, and projects free cash flow to exceed $8bn, driven by continued growth in memberships, an expanded content slate, and higher ad revenue.

Author: Ionuț-Adrian Lazar

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