Netflix Inc. (NASDAQ:NFLX) shares skyrocketed nearly 17 percent on Wednesday after the Scotts Valley, California-based streaming entertainment service posted strong financial results for the fourth quarter.
The company announced that its global subscribers count crossed a landmark of 200 million at the end of 2020. NFLX added that it will no longer need funding for running its daily operations and producing original content for its streaming service.
Netflix posted revenue of $6.64 billion for the quarter, significantly higher than $5.47 billion in the comparable period of 2019. Analysts on average were looking for revenue of $6.6 billion. Earnings for the quarter came in at $542 million, or $1.19 per share, as compared to $1.30 per share in the same period of 2019, and below the consensus forecast of $1.36 per share.
There are 8.5 million new paying subscribers in the quarter as of December 31, well above analysts’ average estimate of 6.1 million additions. Looking forward, NFLX expects to add 6 million paying subscribers in the first quarter, below the consensus forecast of 8 million.
Netflix stock performed exceptionally well in 2020. The Covid-19 outbreak forced governments around the world to impose lockdowns to limit the spread of the virus. People stuck at home increasingly turned to online streaming services including Netflix during the pandemic. The company added a record 25.9 million new subscribers in the first half of 2020. Meanwhile, rival Disney+ is also growing at a rapid pace. Disney announced last month that the Disney+ subscriber count crossed 86 million in just over a year after its launch.
NFLX stock started 2020 trading around $325. Its stock value has increased more than 70 percent over the past year. The stock touched a new 52-week high of $593.29 in the previous trading session following the company’s impressive quarterly performance.