Netflix earnings review: subscriber growth and margins improve, while stock price hits new record
Netflix shares surged to record highs after beating Q4 2024 expectations, with strong subscriber growth and improving margins driving the stock higher.
Netflix Q4 2024 earnings exceed expectations
The streaming giant delivered a strong performance across all key metrics in its fourth quarter (Q4) results. Subscriber numbers, which Netflix reported for the final time, surpassed analyst forecasts.
Higher subscription prices helped boost both revenue and margins, demonstrating Netflix's pricing power in the competitive streaming landscape. The company successfully leveraged its diverse content library to implement price increases.
Trading platform data shows Netflix shares reaching nearly $1000.00 following the results, representing an 80% gain over the past year.
Live sports content appears to be paying off for Netflix, helping to differentiate its offering from competitors. The firm continues to lead the streaming wars despite intense competition.
Advertising revenue shows promising growth
Netflix's advertising tier has become a significant growth driver, with revenue doubling in 2024. Management expects this momentum to continue with another doubling in 2025.
The success in advertising demonstrates Netflix's ability to diversify revenue streams beyond traditional subscriptions. This helps reduce dependency on price increases for growth.
Advertising revenue provides an additional lever for margin expansion, complementing Netflix's core subscription business. The company can monetise its massive viewer base through targeted advertising.
The trading signals suggest investors are responding positively to Netflix's advertising growth strategy.
Operating margins continue upward trajectory
Unlike many tech peers, Netflix has maintained steady margin expansion. This metric helps investors evaluate the company's operational efficiency and profitability.
Operating margins measure profit per dollar of sales after accounting for direct costs. Netflix's consistent margin improvement indicates strong execution and scale benefits.
The company's content investments are delivering returns through subscriber growth and pricing power. This virtuous cycle enables continued margin expansion.
Higher margins translate directly to improved profitability, supporting Netflix's stock price appreciation. The company appears well-positioned to maintain this positive momentum.
Operating margins chart
Technical analysis shows strong uptrend
Netflix shares have established a clear uptrend since October 2023, forming a series of higher highs and higher lows. The latest results have pushed the stock to fresh record levels.
The previous resistance around mid-December's highs has now been decisively broken. This technical breakout could signal further upside potential.
Trading alerts can help investors monitor key price levels and technical patterns in Netflix stock.
Traders should watch for continued momentum following this breakout, while being mindful of potential consolidation after such strong gains.
NFLX price chart
How to trade Netflix shares
- Research Netflix's fundamentals, competitive position, and technical setup through our comprehensive market analysis
- Choose whether you want to trade or invest in Netflix shares
- Open an account with IG to access global markets
- Search for Netflix in our platform or app
- Place your trade based on your analysis and risk management strategy
Key considerations for Netflix traders
Investors should monitor content spending and its impact on margins. Netflix's ability to balance growth investments with profitability remains crucial.
Competition in the streaming space continues to intensify. Netflix's content strategy and pricing power will be important differentiators.
The transition to advertising-supported streaming creates both opportunities and execution risks. Success in this area could drive further upside.
Keep an eye on subscriber metrics through alternative data sources now that Netflix will no longer report this figure directly.
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
Act on share opportunities today
Go long or short on thousands of international stocks with spread bets and CFDs.
- Get full exposure for a comparatively small deposit
- Trade on spreads from just 0.1%
- Get greater order book visibility with direct market access
See opportunity on a stock?
Try a risk-free trade in your demo account, and see whether you’re on to something.
- Log in to your demo
- Take your position
- See whether your hunch pays off
See opportunity on a stock?
Don’t miss your chance – upgrade to a live account to take advantage.
- Trade a huge range of popular stocks
- Analyse and deal seamlessly on fast, intuitive charts
- See and react to breaking news in-platform
See opportunity on a stock?
Don’t miss your chance. Log in to take advantage while conditions prevail.
Live prices on most popular markets
- Equities
- Indices
- Forex
- Commodities
Prices above are subject to our website terms and agreements. Prices are indicative only. All share prices are delayed by at least 15 minutes.
Prices above are subject to our website terms and agreements. Prices are indicative only. All shares prices are delayed by at least 15 mins.
