Netflix shares surged over 10% in after-hours trading, hitting a record high following its impressive fourth-quarter earnings report.

Key Drivers of Growth

The streaming giant added 19 million new subscribers, doubling analyst expectations and bringing its total user base to 302 million.

This growth was driven by hit content, live sports programming like Jake Paul vs. Mike Tyson, and a crackdown on password sharing.

Netflix’s ad-supported tier fueled 55% of new sign-ups in ad-available markets, with membership in this tier rising nearly 30%.

Live event programming, such as NFL games and Squid Game Season 2, further boosted user engagement and registrations.

Financial and Regional Performance

Netflix’s revenue grew 16% year-on-year to $10.25 billion, exceeding analysts’ projections of $10.11 billion. Earnings per share rose to $4.27, up from $2.11 a year earlier.

The UCAN (US and Canada) and EMEA (Europe, Middle East, and Africa) regions remained Netflix’s largest markets, contributing 44% and 32% of total revenue.

Despite an operating margin drop to 22% due to live sports investments, annual revenue grew 16%, and net income jumped 62%.

Netflix plans price hikes in markets like the US, Canada, Portugal, and Argentina to reinvest in improving its platform.

Future Growth and Strategy

Netflix forecasts 2025 revenue between $43.5 billion and $44.5 billion, reflecting 12% to 14% annual growth.

It raised its operating margin target to 29% and expects free cash flow to grow to $8 billion, up from $7.4 billion in 2024.

The company plans more series, films, live events, and gaming initiatives. Upcoming seasons of Squid Game, Wednesday, and Stranger Things are set to boost engagement.

“Netflix’s ad-supported tier expands its user base and attracts premium advertisers, strengthening its position as a leader in entertainment,” said Josh Gilbert, market analyst at eToro.

By delivering standout content and strategic price increases, Netflix remains on track to sustain its growth trajectory.