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Netflix stock climbs 12% after the company said paid subscribers rose 8.5 million during the holiday quarter as cold weather and new locks set in
- Netflix said on Tuesday it had added 8.5 million new subscribers in the holiday quarter
- Originals such as Bridgerton and The Queen’s Gambit helped fuel the growth
- The rebound came as many took refuge in lockdown in colder weather
- Netflix shares jumped 12% on Tuesday after hours
Netflix stock jumped on Tuesday after the streaming company reported an increase in new subscribers for the holiday quarter, beating Wall Street estimates.
The company said it added 8.51 million paying subscribers in the quarter ended Dec.31, beating analysts’ estimates of 6.1 million, according to IBES data from Refinitiv.
It marked a major rebound in subscriber growth after a sluggish third quarter, in which Netflix added just 2.2 million paying users.
In the fourth quarter, Netflix originals like Bridgerton and The Queen’s Gambit helped the service attract more viewers, many of whom were taking refuge in their homes due to new COVID-19 restrictions and the end of winter.
Netflix has admitted in a letter to shareholders it faces increased competition and said it will continue to pour money into originals like ‘Bridgerton’ (above)
The growth in subscribers by year can be seen in this graph released by Netflix on Tuesday
Netflix shares climbed 12% Tuesday after hours
Netflix shares jumped 12% in after-hours trading on Tuesday when quarterly results were announced.
It marked the latest twist in the “ streaming war, ” with Netflix acknowledging in a letter to shareholders that it faced stiff competition from HBO Max, Disney + and others.
“ The strong growth in streaming entertainment has led historic rivals such as Disney, WarnerMedia and Discovery to compete with us in new ways, which we have expected for many years, ” the letter reads.
“That’s part of the reason we’ve moved so quickly to grow and further strengthen our library of original content across a wide range of genres and nations.
Netflix now has 203 million paying subscribers worldwide, compared to Disney + at 86.8 million paying subscribers worldwide.
In Q4, Netflix originals like “ The Queen’s Gambit ” (above) helped the service attract more viewers to take refuge in their homes.
HBO Max reports 38 million “activations” in the United States, but that number includes 12.7 million who are already paying for content through their cable plan.
Netflix reported fourth quarter revenue of $ 6.64 billion on Tuesday, beating expectations.
Earnings per share were $ 1.19, lower than the $ 1.39 expected by analysts.
Netflix has said it will no longer need to raise external funding for day-to-day operations and will even consider returning cash to shareholders through share buybacks.
The last time Netflix pursued buyouts was in 2011, when it switched from DVD by mail to streaming.
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