What’s happening: Shares of Netflix rose sharply during Tuesday’s after-hours trading session, following the release of the company’s fourth-quarter results.
What happened: The streaming leader reported stronger-than-expected sales and earnings for the latest quarter.
Popular series, like the second season of Squid Game, helped Netflix attract a record number of subscribers.
How were the results: The Los Gatos, California-based company reported double-digit growth in sales for the quarter.
Why it matters: Netflix reaffirmed its market dominance in the streaming market, hosting several live sporting events and some popular series, including the second season of Squid Game. This helped the company attract a record number of subscribers during the fourth quarter. The boxing match between Jake Paul and Mike Tyson alone attracted 65 million streams.
Netflix added 18.91 million paid subscribers during the quarter, representing a 15.9% year-over-year surge. The company closed the quarter with 301.63 million paid subscribers.
Average revenue per member rose 1% year-over-year. For the full year, the company’s operating income surpassed $10 billion for the first time in its history.
The company is looking to monetise its popularity by raising prices in the US, Canada, Portugal and Argentina. Netflix’s ad-supported service will now cost $7.99 a month in the US, up from $6.99, while the premium package cost will be increased by 9% to $24.99.
Management guided to revenues of $10.42 billion for the first quarter, representing 11.2% year-over-year growth. They also projected quarterly operating income at $2.94 billion and earnings of $5.58 per share.
The company raised its revenue guidance for the full year to between $43.5 billion and $44.5 billion, up $0.5 billion from its previous guidance range.
How shares responded: Netflix’s shares climbed 14.4% to $994.90 in extended trading on Tuesday, following the release of quarterly results. The stock has jumped around 34% over the past six months.
What to watch: Investors will continue monitoring the company’s new content, which is expected to provide a further boost to its overall results ahead.
Context: The GBP/USD forex pair fell this morning, as investors assessed the latest economic reports.
Details: Data released on Tuesday showed the UK’s unemployment rate rose to 4.4% in the September to November period, from 4.3% in the previous two periods. The figure was also the highest reading since May 2024. The number of payrolled employees fell by 47,000 to 30.3 million in December, recording the biggest decline since November 2020.
Regular pay in the UK, excluding bonuses, rose by 5.6% year-over-year to £660 per week during the three months to November, versus 5.2% in the previous period.
Last week’s data showed an unexpected easing in inflation and downbeat economic growth. The Bank of England is widely expected to cut its key interest rate by 25 basis points during its meeting next month.
Strength in the US dollar also exerted pressure on the GBP/USD forex pair. The US dollar index, which measures the greenback’s performance versus a basket of major peers, rose slightly to 108.10 this morning.
The GBP/USD fell more than 0.1% to 1.2338 this morning, while the EUR/GBP forex pair slipped to 0.8441.
London’s FTSE 100 Index gained 0.33% to close at 8,548.29 on Tuesday, while the more domestically focused FTSE 250 rose 0.53% to settle at 20,595.73.
What to watch: With no major economic data due today, investors await the release of economic reports on CBI Business Optimism Index (1500 UAE Time) and CBI Industrial Trends Orders (1500 UAE Time) from the UK on Thursday. Analysts expect the Confederation of British Industry’s monthly net balance of new orders to improve to -34 in January, from a reading of -40 in December.
Data on services and manufacturing PMIs from the UK, scheduled for release on Friday, will also remain in focus.
Other Markets: US trading indices closed higher on Tuesday, with the Dow Jones index, S&P 500 and Nasdaq 100 up by 1.24%, 0.88% and 0.58%, respectively.
New US President Donald Trump threatened more sanctions on Russia if President Vladimir Putin refused to enter negotiations to end the war with Ukraine. The news sent the RUB/USD pair lower in forex trading this morning.
Australia’s Westpac-Melbourne Institute Leading Economic Index came in unchanged in December, compared to a 0.1% increase in November, which exerted pressure on the AUD/USD forex pair.
New Zealand’s annual inflation rate fell to 2.2% in the December quarter, hitting the lowest rate since March 2021. However, the reading being higher than market estimates of 2.1% sent the NZD/USD pair lower in forex trading this morning.
South Korea’s Composite Consumer Sentiment Index rose to 91.2 in January, from 88.2 in the previous month. However, sentiment on the current domestic economic conditions fell by one point to a reading of 51, exerting pressure on the KRW/USD forex pair.
Canada’s annual core inflation rate accelerated to a six-month high of 1.8% in December, from 1.6% in the previous month, which sent the CAD/USD pair lower in forex trading this morning.
South Africa’s inflation rate (1200 UAE Time) and retail sales (1500 UAE Time), India’s M3 money supply (1530 UAE Time), US MBA mortgage applications (1600 UAE Time), Redbook index (1755 UAE Time) and CB leading index (1900 UAE Time), Canada’s PPI (1730 UAE Time) and raw materials prices (1730 UAE Time), as well as Argentina’s retail sales (2300 UAE Time).