The company credited a mix of programming, including the hit movie “Carry-On” and the second season of “Squid Game,” its most popular series ever. Yet a boxing match between Jake Paul and Mike Tyson delivered a record number of sign-ups, according to the research firm Antenna, dwarfing even Netflix’s first National Football League games.
“Our newly established live programming slate has already delivered some must-watch moments,” the company wrote in its letter. “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.”
Live programming is vital as Netflix builds out its advertising business. The company shows advertising during football and wrestling to all of its members—not just those on the less-expensive ad-supported tier.
The streaming giant has gotten off to a slow start in advertising and said it won’t produce material financial benefits until 2026. But it’s starting to make progress. The majority of new customers opt for advertising in the 12 markets where it is available and the company said it would have enough scale to satisfy advertisers by the end of this year.
This quarter, Netflix is forecasting revenue of $10.4 billion and earnings of $5.58 a share, both below the average of Wall Street estimates. For the year, the company projects as much as $44.5 billion in revenue, a gain of 14% from the year just ended, with an operating margin of 29%.
Netflix will stop reporting subscriber figures after a surge in new customers from its crackdown on password sharing. Analysts and investors had expected the benefits from that effort to wear off by now, but Netflix just posted its single best year ever in terms of subscribers addition, netting 41 million new customers.
Netflix shares rose more than 12% to $977 in extended trading after the results were announced, a price that would mark a new all-time high if it holds in regular trading on Wednesday.
—Bloomberg News, with additional reporting by Ad Age’s Parker Herren