Netflix delivers 19M subscriber adds in blowout Q4, then ups prices

After blowing past analysts’ consensus Q4 forecasts with 18.9 million paid customer additions and revenue growth of 16% to $10.2 billion, Netflix on Tuesday delivered some less heartening news for members in the US, Canada, Portugal and Argentina: Prices are once again going up.

In the U.S., the most popular tier, the ad-free, HD-only Standard plan will rise in price by $2.50 a month to $17.99. And for the first time ever, the ad-supported tier will go up in price, increasing by $1 to $7.99 a month. The bill for the top-end 4K-capable Premium plan is rising $2 to $24.99 a month. And the cost of adding an “extra member” will rise by $1 to $8.99 a month.

The Premium plan also received a price increase in October 2023, but Standard hasn’t seen a price hike in three years.

“If you’re going to ask for a price increase, you better make sure you have the goods and engagement to back it up,” said Netflix Co-CEO Ted Sarandos in a conference call with equity analysts, noting that the streaming company has returning seasons of its three most popular shows ever in 2025 — Wednesday, Stranger Things and Squid Game.

With huge audience performances for live-sports events including the Jake Paul-vs.-Mike Tyson fight in November, and Netflix’s first ever NFL games on Christmas Day, not to mention a massive debut of Squid Game: Season 2 and a big domestic movie performance from Carry-On, Netflix also delivered plenty of “the goods” in the fourth quarter. (You can read the company’s Q4 letter to shareholders here.)

Netflix Q4 2024 earnings snapshot
Netflix Q4 2024 earnings snapshot.  (Netflix)

The fourth quarter marks the final time Netflix will reveal quarterly subscriber metrics. The company ended the practice with a bang, surpassing 300 million customers worldwide from October - December. It was the biggest customer growth quarter ever for Netflix.

Meanwhile, annual operating income surpassed $10 billion for the first time ever, and Netflix reported a Q4 profit of $1.87 billion.

Both Sarandos and Co-CEO Greg Peters downplayed the contribution of any single programming asset in generating Netflix’s boffo Q4, even though season 2 of Squid Game produced a massive 487.6 million hours of global engagement just in its first four days on the platform.

“As we’ve seen throughout our history, no single title drives our acquisition or engagement,” Peters explained, noting the importance of the breadth and depth of Netflix's entire catalog.

And while he admitted to being “thrilled” with the performances of Netflix’s first live-streamed NFL games — which were the most streamed games ever, for anyone, averaging 30 million and 31 million viewers respectively — Sarandos said the economics of full-season live-sports licensing rights are still daunting for the company.

Netflix has pledged to spend more on content in 2025 — $18 billion vs. $17 billion in 2024. And the allocation will be strategic on an international level. Netflix estimates that there are around 750 million accessible broadband households globally (excluding China and Russia) and $650 billion of entertainment revenue in the markets it operate, the latter of which it only captured approximately 6% of in 2024.

“We have a long way to grow. It’s really about where do we put the next billion dollars,” said Netflix CFO Spencer Neumann, who was also on Tuesday’s call.

Finally, Peters suggested that 2025 will be the year Netflix’s transitions from “crawling to walking” with the ad-supported streaming business it currently operates in 12 countries, with Netflix ad revenue doubling in 2024 and expected to double again in 2025.

The co-CEO was bullish on the deployment of Netflix’s own ad server, which has already rolled out in Canada and will deploy in the U.S. starting in April. “It gives us flexibility and allows us to offer advertisers more ways to buy,” Peters said. “And being on our own tech stack … just creates a higher quality experience for our members.”