Investing.com -- Netflix reported Tuesday fourth-quarter earnings that missed, but revenue topped Wall Street estimates as efforts to curb costs boosted margins and a strong slate of shows helped the streaming giant rack up much more subscribers than expected in the quarter.
Netflix Inc (NASDAQ:NFLX) trade 8% higher in afterhours trading following the report Tuesday .
Netflix reported earnings per share of $2.11 on revenue of $8.83 billion. Analysts polled by Investing.com anticipated EPS of $2.21 on revenue of $8.72B.
Blowout subscriber growth boosts revenue
Netflix added 13.12M users, markedly beating analyst estimates of about 8.9 million net adds as efforts to ramp-up subscriber growth delivered an upbeat surprise. That was well ahead of the 8.76M subscribers in Q3, and 7.66M in the Q4 a year earlier.
"Our healthy top line growth reflects the benefits of paid sharing, our recent price changes and the strength of our underlying business driven by a strong slate," the company said.
Operating margin jumped to 17% from 7% in the year ago quarter, driven by lower-than-planned spending, while free cash flow for Q4 was $1.6B, up from $0.3B in the prior year period.
Subscriber growth to slow sequentially in Q1, but remain higher from a year earlier
The momentum in subscriber growth is expected to wane sequentially in Q1, owing to "typical seasonality as well as some likely pull forward from our strong Q4’23 performance," Netflix said, though added that paid net adds were expected to be up versus Q1’23 paid net adds of 1.8M.
Looking ahead, the company forecasts Q1 revenue growth of 13% as performance expected to held back by a slump in Argentine peso relative to the dollar.
For the full-year, the company sees double digit revenue growth and increased its full year 2024 guidance to forecast from to 24% from a range 22% to 23%
Upgrade your decision-making with InvestingPro+! Using discount code “INVEST2024” receive an additional 10% off the InvestingPro+ yearly subscription. Click here and don't forget the discount code.