Netflix on Tuesday blew past Wall Street subscriber estimates in the fourth quarter, driven by a strong slate of shows that included the final season of the long-running royal drama The Crown and David Fincher’s original film, The Killer.

The company reported it added 13.1 million subscribers in the December quarter, its largest-ever fourth-quarter subscriber growth, handily exceeding projected gains of 8.97 million. That brings the total number of subscribers to 260 million.

Netflix shares were up 8.3% in after-hours trading. The stock gained 65% during 2023.

“It is becoming increasingly clear that Netflix has won the ‘streaming wars’,” wrote Bank of America media analyst Jessica Reif Ehrlich.

The company reported per-share earnings of US$2.11, falling short of consensus estimates of $2.22/share. Netflix said the per-share earnings were impacted by a $239-million non-cash loss related to currency exchange rates.

Revenue rose to $8.8-billion, topping forecasts and the company’s own guidance of $8.7-billion in the quarter.

The streaming giant said it expects healthy double-digit revenue growth for full-year 2024, as it continues to add members and invest in its advertising business. Netflix said advertising is not yet a primary driver of revenue growth, but it aims for that to change by 2025.

The company credited gains to the strength of its intellectual property, including Squid Game: The Challenge, a reality show based on its most-watched TV series, new original series such as All the Light We Cannot See, feature films like Zack Snyder’s Rebel Moon: A Child of Fire, and non-English-language programming, including the third season of Lupin from France.

‘Rich history’

It also cited strong demand for licensed titles such as Young Sheldon. Co-CEO Ted Sarandos said Netflix has a “rich history” of breaking some of television’s biggest hits, including Breaking Bad, The Walking Dead, Schitt’s Creek, and more recently, Suits.

“I am thrilled that the studios are more open to licensing again, and I’m thrilled to tell them that we are open for business,” Sarandos said during Netflix’s investor live-stream.

Bank of America’s Ehrlich wrote that Netflix is a beneficiary of changing market dynamics, which are forcing media companies to re-evaluate their strategy of retaining movies and television series exclusively for their own streaming services. She called this a “win-win” proposition, which allows Netflix to reduce its investment in higher-risk original production, even as these licensing deals provide other media companies with much-needed revenue.

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Netflix said it sees growth opportunity if it continues to improve its programming slate and makes inroads in new areas like advertising and games. While the games business is still in its early days, the company said engagement has tripled.

Chief financial officer Spencer Neumann said Netflix plans to increase spending on content, coming out of last year’s dual Hollywood strikes. He anticipates the streamer would invest as much as $17-billion this year, but added: “We want to do it in a smart, judicious, responsible way.”

The company said it continues to invest in and experiment with live programming. On Tuesday, Netflix and TKO Group Holdings announced a more than $5-billion deal to bring World Wrestling Entertainment’s “Raw” and some other programming exclusively on the streaming service in January 2025.

“For decades, the WWE has grown this multigenerational fan base that we believe we could serve and we can grow,” Sarandos said. “We believe that WWE has been historically under-distributed outside of North America. And this is a global deal. So, we can help them, and they can help us build that fandom around the world.”

Third Bridge analyst Jamie Lumley said the WWE deal demonstrates how Netflix continues to diversify its content strategy. “This is the company’s largest move into live programming yet and will bring a large volume of content to the platform each year.”