Netflix Stock Surges 12% Following Strong Q4 2023 Results

Shares of streaming giant Netflix surged 12% today after the company reported its impressive financial results for the fourth quarter of 2023. The stock reached two-year highs as investors reacted positively to the strong growth and higher-than-expected profits.

Netflix introduced an ad-supported subscription tier in late 2022 and cracked down on password sharing in mid-2023, leading to a surge in subscriber numbers. The company ended 2023 with 260 million paid memberships, a significant increase from the previous year. This growth is particularly impressive since Netflix added fewer than 10 million new memberships in 2022.

The higher membership base, coupled with operational efficiency, resulted in a substantial increase in profits for Netflix. The company’s full-year free cash flow (FCF) for 2023 reached $6.9 billion, up from $1.6 billion in 2022. This represents a 21% margin, a significant improvement from the 18% margin in the previous year.

Netflix’s positive outlook for 2024 has further fueled investor excitement. The company projects a year-over-year revenue increase of over 13% for the first quarter and expects an operating margin of 24% for the full year. These figures indicate sustained growth and profitability.

As a result, Netflix stock has reached its highest point in two years as investors recognize the company’s ability to rebound and achieve impressive growth. This profitability also enables Netflix to invest in additional growth opportunities, setting the stage for continued success.