Netflix share rises 12% after company said paid subscribers rose 8.5 million in holiday quarter due to cold weather and new lockdowns
- Netflix said Tuesday that it added 8.5 million new subscribers in the holiday quarter
- Originals such as Bridgerton and The Queen’s Gambit contributed to its growth
- The jump came because many took shelter under a lockdown in colder weather
- Netflix shares rose a whopping 12% on Tuesday in out-of-hours trading
Netflix stock surged Tuesday after the streaming company reported a jump in new subscribers for the holiday quarter, beating Wall Street’s estimates.
The company said it added 8.51 million paid subscribers during the quarter ended December 31, beating analyst estimates of 6.1 million, according to IBES data from Refinitiv.
It marked a major rebound in subscriber growth after a slow third quarter, in which Netflix added just 2.2 million paid users.
In the fourth quarter, Netflix originals such as Bridgerton and The Queen’s Gambit helped the service attract more viewers, many of whom took shelter at home due to new COVID-19 restrictions and as winter approached.
Netflix admitted in a letter to shareholders that it faces increasing competition, saying the money would get stuck in originals like ‘Bridgerton’ (above)
The growth in the number of subscribers per year can be seen in this chart released by Netflix on Tuesday
Shares of Netflix rose a whopping 12 percent on Tuesday in out-of-hours trading
Shares of Netflix were up a whopping 12 percent in after-hours trading on Tuesday, as quarterly results were announced.
It marked the latest turn in the ‘Streaming Wars’, with Netflix acknowledging in a letter to shareholders that it is facing heated competition from HBO Max, Disney + and others.
“The boom in entertainment streaming has led older competitors such as Disney, WarnerMedia and Discovery to compete with us in new ways, which we have been expecting for years,” the letter said.
“This is, in part, why we have moved so quickly to grow and further strengthen our original content library across a wide variety of genres and countries.”
Netflix now has 203 million paid subscribers worldwide, versus Disney + with 86.8 million paid subscribers.
In the fourth quarter, Netflix originals such as ‘The Queen’s Gambit’ (above) helped the service attract more viewers hiding at home
HBO Max reports 38 million ‘activations’ in the US, but this number includes 12.7 million who already pay for the content through their cable package.
Netflix reported fourth-quarter revenue of $ 6.64 billion on Tuesday, exceeding expectations.
Earnings per share were $ 1.19, lower than the $ 1.39 analysts had expected.
Netflix said it would no longer need to raise outside funding for its day-to-day operations, and would even investigate returning cash to shareholders through stock buybacks.
The last time Netflix went to buybacks was in 2011, when it went from DVDs by mail to streaming.