Shares of Netflix soared 13% to an all-time high on Wednesday as the streaming giant’s big bet on sports helped it add a record 18.9 million subscribers in the holiday quarter, extending its lead already significant to other players.
The company also unveiled price hikes on Tuesday in markets including the US, aiming to boost revenue as it shifts focus from subscriber growth to other performance metrics such as sales.
“We thought it was a typo. Netflix defied the odds once again, offering subscriber additions far in excess of even the most unreasonable subscribers,” Bernstein analyst Laurent Yoon said.
The company’s global subscriber base now exceeds 300 million, giving it a commanding lead in the streaming wars and more leverage in talks with marketing firms as it aims to grow its ad-supported business.
Netflix, already worth more than the combined valuations of rivals Disney, Comcast, Paramount and Warner Bros. Discovery, was set to add more than $50 billion to its roughly $370 billion market capitalization if gains continue.
The stock hit a record high of $988 during morning trading on Wednesday, paving the way for a possible stock split.
Its shares rose more than 80% last year, boosted by Netflix’s expansion into live sports with content including a boxing match between Jake Paul and Mike Tyson, as well as the debut of popular National League games. Football on Christmas Day – which included a half-time performance by pop star Beyonce.
The Nov. 15 Tyson-Paul match was the most-streamed sporting event ever and brought in the most Netflix recordings of any event since Antenna began tracking this data in 2019.
Its strong content in the quarter also included the second season of “Squid Game” and the hit movie “Carry-On.”
“Sports rights can be incredibly expensive and it makes sense that Netflix has chosen to go with special events. Such events are also perfect for attracting advertisers eager to reach a large audience,” said Dan Coatsworth, analyst at AJ Bell.
Coatsworth, as well as several other analysts, said Netflix would now inevitably begin bidding for other major sports rights.
The company has already secured the US broadcast rights for the 2027 and 2031 editions of the FIFA Women’s World Cups.
The strong report, however, masked a concern: subscriber growth did not translate into a similar increase in revenue.
Sales rose 16% and were only about $100 million above estimates, while subscriber growth was about double the number expected.
The narrow growth can be attributed to both subscriber growth from lower average revenue per user (ARPU) countries and significant signups for the ad-supported tier, said Ben Barringer, technology analyst at Quilter Cheviot.
But he added that price increases already announced and those expected to appear during 2025 should boost sales.
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