Netflix added more than 13 million subscribers during the fourth quarter, the company said Tuesday, extending its lead in the streaming video business.
The Los Gatos, Calif.-based streamer’s subscriber growth beat analysts’ estimates of nearly 8.7 million customer additions, according to polling by FactSet. It was the largest fourth-quarter growth in subscriber adds in the company’s history, bringing its total subscribers to about 260 million, Netflix said.
The company reported revenue of $8.8 billion in the fourth quarter, up 12.5% from the same time a year earlier. Net income was $938 million, compared with $55 million in the fourth quarter of 2022. Netflix beat analyst expectations of $8.72 billion in revenue and $990 million in net income, according to FactSet.
“We believe there is plenty of room for growth ahead as streaming expands, and our north star remains the same: to thrill members with our entertainment,” Netflix said in a letter to shareholders on Tuesday. “If we can continue to improve Netflix faster than the competition, we’ll have an increasingly valuable business — for consumers, creators and shareholders.”
Netflix earlier on Tuesday announced a major sports rights deal with WWE, bringing weekly pro wrestling show “Raw” exclusively to Netflix in the U.S., Canada, the United Kingdom, Latin America and other territories starting in January 2025. The streamer will also carry WWE shows and specials outside the U.S., including “SmackDown” and “NXT,” its live events like WrestleMania, as well as WWE documentaries and series in 2025.
The deal is for an initial 10 years with rights fees equaling more than $5 billion, with an option for Netflix to extend the agreement, according to a regulatory filing from TKO, the parent company of WWE.
Netflix stock closed at $492.19 a share, up 1%, and continued to increase about 4% in after-hours trading to $513.50 a share.
“The announcement is a coup for Netflix, in our view, given Raw’s historical popularity,” wrote John Blackledge, a TD Cowen managing director and senior research analyst in a report. TD Cowen has an outperform rating on Netflix stock.
Some analysts said they believe having WWE on Netflix will help boost advertising for the streamer, which launched a cheaper ad tier in October 2022. Earlier this month, Netflix at the trade show CES said its ad tier had more than 23 million monthly active users.
Netflix continued to lean into live events during the fourth quarter, hosting its first celebrity golf tournament, the Netflix Cup, which featured Formula One drivers and PGA Tour golfers. The company also launched a reality show called “Squid Game: The Challenge” based on its most popular Korean language series, “Squid Game.”
Netflix continued to see strength in its non-English language shows, leaning into manga fandom with series including “Yu Yu Hakusho.”
The company ended the year with almost 90 mobile video games, a relatively recent initiative for the streamer. A Netflix executive told The Times that the company was pleased with its progress and met the goals it had in 2023 around engagement. Netflix said engagement in games tripled last year.
On Monday, Netflix confirmed that its film chair Scott Stuber will be leaving in mid-March to start his own media company. After he leaves, his boss, Chief Content Officer Bela Bajaria, will fill the role until she finds Stuber’s replacement.
Netflix said in its shareholder letter that it is logical to expect further consolidation among companies with large and declining linear networks, but said it is not a buyer. “We’re not interested in acquiring linear assets,” Netflix said.
“If we continue to execute well and drive continuous improvement — with a better slate, easier discovery and more fandom — while establishing ourselves in new areas like advertising and games, we believe we have a lot more room to grow,” Netflix said in its letter.
