Netflix (NFLX) earnings Q4 2023

LOS ANGELES — Shares of Netflix jumped in extended trading Tuesday after the company reported adding 13.1 million subscribers during the fourth quarter, stronger growth than Wall Street expected as the streamer builds its ad-supported service and cracks down on password sharing.

Netflix now has 260.8 million paid subscribers, a new record for the service.

The subscriber growth easily tops the 8.76 million paid membership adds Netflix reported in the third quarter. The company also blew past Wall Street expectations for the fourth quarter, as forecasts projected another 8 million to 9 million paid membership adds.

Here are the results:

• Earnings: $2.11 per share vs. $2.22 per share expected by LSEG, formerly known as Refinitiv.
• Revenue: $8.83 billion vs. $8.72 billion expected by LSEG.
• Total memberships: 260.8 million vs. 256 million expected, according to Street Account

While rivals in the streaming space have struggled to reach profitability, and have been cutting down on content spend, Netflix is prepared to invest in a larger slate. However, it won’t be doing that through acquisitions of traditional entertainment companies or linear assets, the company said in a letter to shareholders Tuesday.

“As our competitors adjust to these changes, it’s logical to expect further consolidation, particularly among companies with large and declining linear networks,” the company said. “We’re not interested in acquiring linear assets. Nor do we believe that further M&A among traditional entertainment companies will materially change the competitive environment given all the consolidation that has already happened over the last decade.”

But that won’t stop the company from partnering with content makers who have traditionally worked in the linear space. Netflix took another step toward building subscribers when it announced earlier Tuesday that it would stream the popular WWE Raw starting next year. The deal is the streaming platform’s biggest step yet into live entertainment.

The company foresees continued competition going forward.

“It’s why continuing to improve our entertainment offering is so important, and as many of our competitors cut back on their content spend, we continue to invest in our slate,” the company wrote to shareholders.

Netflix is still navigating its transformation from targeting subscriber growth to focusing on profit, using price hikes, password crackdowns and ad-supported tiers to boost revenue.

Investors got a sneak preview of growth in Netflix’s advertising-based plan earlier this month, when the company’s president of advertising, Amy Reinhard, told attendees at the Variety Entertainment Summit at CES that the company now has more than 23 million global monthly active users. That’s up from 15 million that the company reported in November.