Netflix Adds 19 Million Subscribers, Growth Is Far For Over

Key Points

• Netflix achieved a huge success in the final quarter of 2024, adding a record number of subscribers.
• Live events and key TV releases helped propel this growth.
• The company's price hikes, live event momentum and its ad-based tier leave upside remaining.

Netflix NASDAQ: NFLX completely shattered analyst expectations in its latest earnings report, sending shares up over 14% in after-hours trading on Jan. 21. The consumer discretionary company's subscribers grew by an incredible 19 million. This helped the stock rise above its late 2024 all-time high. Netflix stock massively outperformed in 2024, gaining 83%, over triple the return of the S&P 500. This post-earnings rise ended the company’s recent slide when its shares fell over 10% between Dec. 11, 2024, and Jan. 13, 2025.

Below, I’ll further break down the report that sent shares skyrocketing and detail the events that allowed for this massive success. I’ll also share my thoughts on why Netflix stock can continue hitting all-time highs in 2025 and beyond.

Netflix’s Subscriber Additions Blow Estimates Out of the Water

Netflix's subscriber count increase of 19 million was extremely impressive, nearly doubling up on the 8.9 million adds Wall Street expected. The absolute number of quarterly subscriber additions was the largest in the company’s history. Overall, it helped the company grow its subscriber count by 40% for the full 2024 year. This demonstrates Netflix’s ability to continue growing at a rapid pace despite already being the world’s largest streaming service. Revenue topped estimates by $140 million, coming in at $10.25 billion. The company beat solidly on earnings per share (EPS) as well. It also raised its revenue guidance for 2025 by $500 million.

Important new releases on the platform, as well as the company’s push into live sports, helped drive its immense subscriber growth. This included the premiere of Squid Game: Season 2, which is now the third most-watched TV season in company history. Additionally, the company’s broadcasts of the Jake Paul vs. Mike Tyson boxing match and two Christmas Day National Football League games attracted huge viewership.

Overall, 108 million viewers and 65 million viewers tuned into these events, respectively. While these developments massively helped Netflix to end 2024, the company’s future plans show that growth is far from over.

Netflix Can Raise Prices Without Losing Users

Another big development from Netflix’s earnings call was the company's decision to institute increasing subscription prices. The company's prices will rise across its standard, premium, and ad-based subscriptions. The hikes will range between 8% and over 16% in the U.S., depending on the plan. This is the first time Netflix has raised prices on its most popular Standard Plan since 2022.

This presents a rare opportunity for the company to boost revenues. However, the last time Netflix increased prices for this tier, it experienced a notable rise in churn. Churn measures the percentage of users who stopped using the product in a period. Churn increased from 2% in 2021 to 3.5% through the first nine months of 2022.

However, there are reasons to believe this won’t be the case this time around. First, the 2022 rise in churn coincided with a significant increase in churn among most streaming services. This makes it difficult to say how much of a negative effect the price increases actually had.

Second, Netflix is poised to remain the cheapest streaming service users can buy per hour of watching. This is a testament to Netflix’s ability to produce a lot of highly invested content, which has led to the company maintaining an industry-leading low churn rate.

Further allowing Netflix to minimize churn due to price increases is its Standard With Ads tier. The company introduced it in Oct. 2023. Even with the price of this tier increasing to $7.99, it remains tied for the lowest-priced plan offered since 2017. The low-priced plan will likely attract cash-strapped users affected by price increases. They should trade down to it as prices rise rather than completely canceling their subscription.

Live Events and Ad-Tier Growth Are Long-Term Drivers of Success

The ad tier feeds into another one of Netflix’s key initiatives for 2025: growing ad revenue. Netflix doubled the size of this business in 2024 and plans to do so again in 2025. It is still a relatively small part of the overall business, making it a long-term growth driver.

Lastly, the company is just getting started in the live events space. This will be another driver of long-term growth, demonstrated by the success achieved so far. The company will continue hosting WWE Raw and has signed a deal to broadcast the 2027 and 2031 FIFA Women's World Cups exclusively.