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Netflix shares surged after the streaming giant reported its best quarter of growth since viewers were stuck at home in the early days of the pandemic.
The company signed up 13,1 million new customers in the final three months of 2023, exceeding Wall Street’s estimate of 8,91 million and beating projections in every region of the world. Netflix added more than 5 million customers in Europe, the Middle East and Africa alone. Sales rose to US$8,83 billion, the company said on Tuesday, also topping forecasts.
The stock rose as much as 14 percent to US$559 in New York on Wednesday morning, the biggest gain since October.
Netflix rebounded from a rocky 2022 by posting one of its strongest years of customer growth, buoyed by a crackdown on password sharing, the introduction of a cheaper advertising-supported option and a strong slate of programmes. Hit shows of the latest quarter included the post-apocalyptic thriller Leave the World Behind and a documentary about soccer great David Beckham.
Netflix’s strong performance stands in sharp contrast to many of its competitors in Hollywood, which operate shrinking cable networks and unprofitable streaming services. Those companies are now merging and cutting jobs to try and keep up.
Just a couple of years ago, it seemed as though Netflix had hit a ceiling on growth after the company lost customers in the first half of 2022. But the steps taken since then have paid off.
“We believe we’ve successfully addressed account sharing, ensuring that when people enjoy Netflix they pay for the service too,” the company said in a letter to shareholders.
While the ad-supported tier got off to a slow start, it has begun to gather momentum. The company said earlier this month it now has more than 23 million people using the tier. — Bloomberg.
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