Netflix shares soared 13% to an all-time high on Wednesday after the streaming giant’s big bet on sports added a record 18.9 million subscribers during the holiday quarter, thus increasing its already considerable advantage over other players.
The company also unveiled price hikes in markets, including the United States, on Tuesday in an effort to increase revenue while focusing subscriber growth on other performance indicators such as sales.
“We thought it was a typo. Netflix has once again defied all odds, growing subscriber numbers well beyond even the most unreasonable subscriber bogeyman,” said Laurent Yoon, analyst at Bernstein.
The company’s global subscriber base now exceeds 300 million, giving it a sizable lead in the streaming wars and greater leverage in negotiations with marketing companies as it seeks to expand its funded business through advertising.
Netflix, already worth more than the combined valuations of rivals Disney, Comcast, Paramount and Warner Bros. Discovery, has added more than $50 billion to its roughly $370 billion market cap, if gains hold.
The stock hit an intraday record of $999 on Wednesday, setting the stage for a possible stock split. It closed at a record price of $953.99, up 9.7%.
Its shares have soared more than 80% in the past year, driven 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 the popular National Football League on Christmas Day – which included a half boxing match between Jake Paul and Mike Tyson. time performance by popstar Beyoncé.
The November 15 Tyson-Paul fight was the most-streamed sporting event of all time and generated the highest number of Netflix sign-ups for any event since Antenna began tracking this data in 2019.
Its strong content slate during the quarter also included the second season of “Squid Game” and the hit streaming film “Carry-On.”
“Sports rights can be incredibly expensive and it makes sense why Netflix has chosen to host special events. Such events are also perfect for attracting advertisers who want to reach a large audience,” said Dan Coatsworth, analyst at AJ Bell.
Coatsworth, along with several other analysts, said Netflix will inevitably begin bidding for other major sports rights.
The company has already secured U.S. broadcast rights for the 2027 and 2031 editions of the FIFA Women’s World Cup.
This strong report, however, masks a concern: the increase in subscribers has not translated into a similar increase in revenue.
Sales rose 16% and only beat estimates by about $100 million, while subscriber growth was about twice as high as expected.
The slight gap could be attributed to both subscriber growth in countries with lower average revenue per user (ARPU) and strong sign-ups at the ad-supported tier, said analyst Ben Barringer technology at Quilter Cheviot.
But he added that the price increases already announced and those expected during 2025 should boost sales.
