Netflix Shares Surge To All Time High As Global Streaming Domination And Stellar Q4 Impress Investors
Investors who own stock in Netflix are doing the happy dance this morning as shares of the streaming service shot up more than 8 percent in after market hours, reaching a record high of more than $145 per share. The company that made a name for itself by renting DVDs through mail before transitioning to a streaming juggernaut caught the attention of investors by capping off 2016 with some big numbers.
Netflix finished the year with 93.8 million members after adding 7.05 million in the fourth quarter, tallying 19 million net additions for the full year. That puts the company on pace to top the 100 million member mark by the second quarter of this year, and perhaps by the end of the first quarter (Netflix forecasts 5.20 million net additions this quarter, which would bring the total number of subscribers to 99 million).
It has been a remarkable transition for Netflix. This quarter marks the 10-year anniversary of Netflix's pivot to streaming. The company still maintains a profitable DVD-by-mail business, as it was met with significant backlash when it tried to become a streaming-only company, but by and large it rakes in the most revenue and profits from streaming movies and TV shows to subscribers, including original content such as Narcos, Orange is the New Black, and Stranger Things.
Netflix finished the year off strong. In the fourth quarter, global streaming revenue grew 41 percent year-over-year to $2.4 billion. With DVD rentals thrown in, Netflix's total revenue for the quarter came to $2.48 billion with a $67 million profit. A big reason for Netflix's strong finish is its catalog of original programming.
"It’s amazing to think that we launched original programming on Netflix in 2013 and in just four years, our original series accounted for five of the top 10 most searched TV shows of 2016 globally, including Stranger Things at #1, according to Google trends," Netflix said. "On January 8, we were honored that The Crown received the Golden Globe Award for Best TV Series (Drama), while Claire Foy won the award for Best Performance by an Actress in a TV Series (Drama) for her portrayal of Queen Elizabeth II."
There are more awards to come. Later this month, The Screen Actors Guild Awards will feature eight individual Netflix original series with 17 nominations, the most of any network.
Looking ahead, Netflix will attempt to keep the momentum going as it fends off competition from Amazon Prime Video, which it said "expanded recently to match our territory footprint," along with YouTube and growing video consumption on Facebook. Netflix also pointed to Apple as a potential rival, should the Cupertino outfit add video to is music service as rumored.