Netflix closed 2024 with a bang, adding 19 million new subscribers in its fourth quarter—more than any quarter in its history. That milestone pushes the streaming giant past the 300 million subscriber mark, a significant achievement as it prepares to shift the focus away from subscriber metrics altogether.
With $10.25 billion in revenue (+16% year-over-year) and blockbuster hits like Squid Game season 2, the Tyson/Paul fight, and NFL Christmas games fueling growth, Netflix is showing its ability to dominate both globally and across categories like live events and ad-supported streaming.
But this quarter also marks a turning point. Subscriber updates are out, and the focus shifts to revenue, margins, and profitability as Netflix continues evolving from a subscriber-focused platform to a revenue-driven powerhouse.
Here’s what Q4 tells us about where Netflix is headed:
Record-Breaking Growth: Thanks, Jake Paul and Squid Game
Netflix didn’t just win the fourth quarter—it obliterated it. With 19 million new subscribers, the company torched the analyst consensus of around 9 million. Credit goes to its stacked quarter:
- The Squid Game season 2 debut turned the platform into appointment viewing again.
- Live sports like the Tyson/Paul boxing match shattered streaming records.
- Netflix’s first NFL Christmas games brought in viewership numbers that rivaled broadcast TV.
Clearly, Netflix’s strategy to branch out into live events isn’t just noise—it’s a real driver for subscriber engagement and growth. However, with sports rights costing more than a season of Stranger Things, the question is how Netflix plans to sustain this momentum.
Shifting Focus: From Subs to Dollars
Netflix reported $10.25 billion in revenue for Q4 (+16% YoY) with an operating margin of 22.2%. While the margin dipped slightly from Q3’s high of 29.6%, the company is forecasting a strong rebound in Q1 2025, with an anticipated margin of 28.2%. Netflix also raised its 2025 revenue guidance to $43.5B-$44.5B, up $500 million from prior expectations.
Translation? Netflix is walking the walk when it says the focus is shifting to profitability. Margins, not memberships, are now the name of the game.
Ad-Supported Tier: From Experiment to Powerhouse
The ad tier is no longer Netflix’s side hustle—it’s a major driver. Memberships in the ad-supported plan jumped 30% quarter-over-quarter, with over 55% of new sign-ups choosing the tier in regions where it’s available. The company’s new Extra Member with Ads feature, set to roll out in 10 countries, is another step toward squeezing more juice out of the ad business.
Sure, ad revenue isn’t broken out separately, but Netflix is playing the long game here. With its in-house ad tech gaining steam (it’s already live in Canada), the company is setting itself up to challenge CTV powerhouses like YouTube and Hulu.
What’s Next: Big Bets, Big Risks
Netflix made it clear in its shareholder letter: the fight isn’t over. While rivals struggle to turn a profit or scramble to cut costs, Netflix is doubling down on its big bets:
- Live sports and events: NFL, WWE, and Tyson/Paul were just the start. Don’t be surprised if Netflix comes knocking for more rights soon—if the price is right.
- Global growth: Netflix’s strategy works everywhere, even in mature markets, with subscriber gains of 4.82 million in the U.S. and Canada, 5 million in EMEA, 4.94 million in APAC, and 4.15 million in LATAM.
- Engagement over subscriptions: Starting in Q2, biannual engagement reports will replace subscriber disclosures. This could become a key metric as Netflix develops content that keeps viewers glued to the platform.
But it’s not all rosy. Average revenue per member (ARM) growth stalled in some regions, and content costs continue to climb. Throw in the usual headwinds; the path forward isn’t without bumps.
Looking Ahead
Netflix is still the streaming king, but it’s shifting the game. By focusing on revenue, profits, and live events over subscriber counts, it’s betting big on its future. Risky? Maybe. But after a record-breaking Q4, betting against Netflix looks even riskier.
