Netflix reported its biggest ever quarterly subscriber gain in the fourth quarter of 2024, surpassing the 300 million subscriber milestone. The growth was driven by record-breaking viewership of Squid Game season 2 and the streaming company's recent live sports push.
Netflix added a record 18.91 million subscribers in the fourth quarter, taking its paid membership base to 301.6 million, up 15.9 percent year-on-year (YoY). The company's earlier largest gain was in the first quarter of 2020, when it added 15 million subscribers at the beginning of the COVID-19 pandemic.
This marks the final quarter that Netflix will report quarterly paid membership additions. The company has previously attributed the decision to the differing business impacts of incremental memberships across its various pricing tiers in markets across the world.
Netflix will focus on revenue and operating margin as its primary financial metrics, while considering engagement as the best indicator for member satisfaction.
For the quarter, revenue grew 16 percent YoY to $10.25 billion while operating income rose 22.2 percent to $2.3 billion. Operating margin increased 22.2 percent for the quarter while net profit nearly doubled to $1.87 billion from the year-ago period .
For the entire year, Netflix's revenue grew 16 percent to $39 billion while operating profit exceeded $10 billion for the first time. The company also added a record 41 million subscribers during the period.
The Asia-Pacific region, which includes India, added 4.94 million subscribers, taking the subscriber base to 57.5 million. The region's revenue grew to $1.2 billion, up 25.9 percent from the previous year. Asia-Pacific accounted for 11.8 percent of the service's total revenue in Q4 2024.
While Netflix didn't disclose specific details about its performance in India, the country remains one of the vital markets for its growth. In Q2 2024, the streaming service said India was the second-largest market in terms of paid subscriber additions and the third largest in terms of revenue growth percentage, without disclosing the numbers.
Read: Netflix bets on cricket, documentaries to attract users in India amid rising competition
Squid Game drives Q4 viewership growth
Netflix said Squid Game, which returned for a second season, is on track to become one of the service's most watched original series seasons with 165.7 million views. Action thriller Carry-On joined the ranks of all-time Top 10 films list with 160.1 million views. The company defines views as the total hours watched divided by the movie runtime.
The live boxing match between Jake Paul and Mike Tyson in November, however, drove a massive number of signups on the service.
“Although our live programming will likely be a small percentage of our total view hours and content expense, we think the eventized nature will result in outsized value to both our members and our business" Netflix said in a letter to shareholders.
The company said it plans to focus on improving its core business with more series and films in 2025 along with an enhanced product experience.
Later this year, Netflix plans to offer new seasons of its biggest shows including Squid Game, Wednesday and Stranger Things.
Netflix, which began offering ad-supported subscription plans in 2022, is also looking to scale up this business in 2025. These plans are available in 12 markets, including the United States, United Kingdom, Canada, and Australia, and had garnered about 70 million users until November 2024.
In the markets where these plans are available, it accounted for over 55 percent of signups and membership grew nearly 30 percent from the previous quarter, the company said in the letter. The streaming service doesn't offer these plans in India at present.
"We’re on track to reach sufficient scale for ads members in all of our ads countries in 2025. A top priority in 2025 is to improve our offering for advertisers so that we can substantially grow our advertising revenue," Netflix said.
The company said it will also be hiking prices across most of its plans in certain markets such as the United States, Canada, Portugal and Argentina.
Expanding live programming and games
In November, Netflix rolled out its first party ad tech platform in Canada and has fully transitioned all ad serving in Canada in-house, it said.
"Over time, our ad tech platform will allow us to better deliver critical capabilities to advertisers including expanded programmatic availability, enhanced targeting and additional measurement and reporting. We’ll roll out our first party ad platform in the remaining ads countries in 2025, starting with the US in April" Netflix told shareholders.
Netflix also plans to invest in further developing newer initiatives such as live programming and games.
"We're not focusing on acquiring rights to large regular season sports packages; rather, our live strategy is all about delivering can’t-miss, special event programming" the company stated.
In terms of games, Netflix said it is focused on offering titles in a few key genres including immersive, narrative games based on the firm's IP, socially engaging party games, games for kids and mainstream established titles such as Grand Theft Auto. The video-streaming platform will also continue to test and expand its offering of cloud games on television in 2025, it said.
Netflix started testing games with a small number of members in Canada and the United Kingdom on select televisions, and on PCs and Macs through Netflix.com in August 2023.
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