Netflix racked up 8.76 million global paid subscribers last quarter — hitting 167.1 million — beating expectations overall but still soft on U.S. additions. Earnings in the fourth quarter popped and revenue came in a hair higher than anticipated, the company said Tuesday.
Fourth-quarter revenue came in at $5.47 billion, versus $4.2 last year. Earnings per share of $1.30 topped 30 cents the year earlier and Wall Street estimates of 53 cents.
The latest financial and subscriber numbers were hotly anticipated as testament to the streamer’s ability to withstand growing competition. Disney+ and Apple TV+ launched last fall. Two more heavyweight rivals, HBO Max and Peacock, will land this spring. Netflix had seen subdued growth in domestic subscribers versus international even before the glut of new entrants.
To compete, it’s been ramping up spending on content and beachheads around the world from London to Paris to Mumbai, outlays of billions that has had some investors fretting.
In its quarterly letter to shareholders today, the company acknowledged that the launch of rival streaming services hurt results in the U.S. and Canada, where net additions came in at about one-third of where they were in the year-earlier fourth quarter.
The showing “is probably due to our recent price changes and to US competitive launches,” the letter said. “We have seen more muted impact from competitive launches outside the U.S.”
Addressing competition later in the letter, Netflix said the influx of new players is “reinforcing the major trend of the transition from linear to streaming entertainment. This is happening all over the world and is still in its early stages, leaving ample room for many services to grow as linear TV wanes. We have a big headstart in streaming and will work to build on that by focusing on the same thing we have focused on for the past 22 years – pleasing members.”
As evidence, the letter also included a chart showing Google search trends in the quarter, showing its series The Witcher drew far more searches than Disney’s The Mandalorian, Amazon’s Jack Ryan and Apple TV+’s The Morning Show.