Netflix raises monthly prices after a strong earnings report sends the stock soaring $125
Netflix subscribers soon will be shelling out more to stream original hits like "Nobody Wants This" and "Stranger Things" as well as the typical Netflix fare of older television shows and movies. With the price hike, those paying monthly for service without ads will be handing over $17.99. That works out to a $2.50 or 16.1% increase from the $15.49 that this tier of Netflix previously cost. A standard account with ads rose one dollar per month from $6.99 to $7.99, a 14.3% hike.
With the new subscription prices, the highest-priced tier of service, which includes 4K video resolution, will get a $2 per month hike to $24.99. This works out to an increase of 8.7%. Netflix last raised the prices for its standard and premium plans in October 2023. The company also reported its latest quarterly results which might have given it the confidence to hike monthly subscription prices.
"As we continue to invest in programming and deliver more value for our members, we will occasionally ask our members to pay a little more so that we can re-invest to further improve Netflix."-Netflix
Netflix reported that revenue rose to $10.25 billion for the fourth quarter which was the first time the video streamer exceeded gross of $10 billion in any quarter. Net income came to $1.87 billion or $4.27 per share. The number of Netflix subscribers streaming worldwide rose to 302 million, up 15.9% from the same quarter last year. Helping to add new subscribers was certain content including the second season of "Squid Game," which set a record for a Netflix premiere with 68 million viewers in the first week.
The Jake Paul vs. Mike Tyson fight might have been a farce, but it set a record for the most streamed sporting event in history. The two NFL playoff games streamed on Christmas Day were the two most streamed games in NFL history. And Netflix sees the good times continuing. Partly due to the price hikes, Netflix forecasts $10.4 billion in revenue for the current quarter which would be an 11.2% annual gain. Estimated net income for Q1 2025 is $2.44 billion.
For all of 2025, Netflix raised its revenue guidance (something every stock analyst loves to hear) to a range between $43.5 billion and $44.5 billion. That is half a billion higher than previous estimates. Some of the streaming platform's most popular shows will be returning in 2025. These titles include "Squid Game," "Wednesday," and "Stranger Things."
Wall Street loved the report and Netflix shares soared $125.12 after hours or 14.4% to close at $994.80.
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