Netflix Finally Surprised Skeptics with Healthy Worldwide ‘Member-Driven’ Growth

January 24, 2024

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Netflix Finally Surprised Skeptics with Healthy Worldwide ‘Member-Driven’ Growth

Netflix (NFLX) had its best subscriber growth since the start of the pandemic, shares jumped up 4%, as revenue continued to rise. The number of paid streaming members worldwide reached 13.12 million, representing a YoY increase of 12.8% to 260.28 million.

Revenue also saw double-digit growth, rising 12.5% ​​to $8.83 billion and shrugging off bad anticipations after the previous quarters’ weak results, beating consensus estimates of $8.71 billion. Operating income, however, fell to $1.5 billion, but while operating margin was 16.9% in Q4, operating margin hit 21% in fiscal 2023, up from 18% in 2022 and above the company's own 20% margin target. Free cash flow remained strong at $1.58 billion, and net cash flow from operations stood at a healthy $1.66 billion. Both figures were down from the previous quarter, but were up significantly from $332 million and $444 million, respectively, a year earlier.

During a conference call, Netflix executives mainly focused on their ambitious 2024 goals, saying new growth momentum will strengthen as the number of paying subscribers are projected to further increase. Last year “was a very unusual year for us; it was basically all member-driven growth,” Chief Financial Officer Spence Neumann said.