Netflix posts best customer gain since pandemic surge

Netflix Inc. signed up 13.1 million customers in the final three months of 2023, the streaming giant’s best quarter of growth since viewers were stuck at home in the early days of the pandemic. The strong tally exceeded Wall Street’s estimate of 8.91 million and beat projections in every region of the world, with Netflix adding more than 5 million customers in Europe, the Middle East and Africa alone. Sales rose to $8.83 billion, the company said Tuesday, also topping forecasts. Netflix rebounded from a rocky 2022 by posting one of its strongest years of customer growth ever, buoyed by a crackdown on password sharing, the introduction of a cheaper advertising-supported option and a strong slate of programs. Hit shows of the latest quarter included the post-apocalyptic thriller “Leave the World Behind” and a documentary about soccer great David Beckham. Sign up for Ad Age newsletters From influencer marketing to agencies, get the latest news and analysis delivered to your inbox Click here Shares of Netflix rose as much as 7.7% to $530 in extended trading after the announcement. They are up 38% in the past year through the close in New York. The robust year-end to subscriber growth may not continue into 2024. Netflix said it won’t add as many customers in the first quarter of 2024 as it did in the final months of 2023, though the tally will exceed the year-ago period’s 1.75 million. Wall Street expects Netflix to add 4.31 million customers in the quarter. That won’t hurt sales growth, however. Netflix said it will continue to boost revenue at a double-digit rate, in part by raising prices, as it has done for many years now. When Netflix lost customers in the first half of 2022, management responded by taking steps it had long resisted. The company introduced advertising, and forced customers to stop sharing passwords. The ad-supported tier got off to a slow start, but has begun to gather momentum. The company said earlier this month it now has more than 23 million people using the tier. Netflix still makes almost all of its money from people who pay to watch films and TV shows on-demand. But that will change in the years ahead. The company has invested millions in video games and this week took another step in a new direction by striking a deal to stream Netflix’s strong performance stands in sharp contrast to many of its competitors in Hollywood, which operate shrinking cable networks and unprofitable streaming services. Fourth-quarter earnings rose to $2.11 a share, though that was short of Wall Street forecasts. Netflix generated net income of $5.41 billion for all of last year and closed 2023 with $7.1 billion in cash and short-term investments. —Bloomberg News Subscribe to Ad Age Sign up now for the latest industry news and analysis Click here

Netflix posts best customer gain since pandemic surge

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