Shares in streaming giant Netflix (NFLX) were brighter today after cost-conscious Brits helped its U.K. arm rake in record annual profits.
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Netflix said that pre-tax annual profits at Netflix Services U.K. came in at £63 million in 2024, up from the £60.6 million it achieved in 2023. Its revenues also leapt from £1.66 billion in 2023 to £1.84 billion.
Netflix said the increase in its revenue was due to an 11% surge in the average number of paid memberships during the year.
It said more than 55% of its new sign-ups had come through its advertising tier while membership on its advertising plan grew by almost 30% quarter over quarter.
The number of subscribers has been boosted by the streaming service’s crackdown on password sharing in the UK. But, the company is also seeing growth elsewhere in Europe, the Middle East and Africa.
During the 12 months, the company also distributed an interim dividend of £50 million to its US parent. In August last year, it also loaned £375 million to Netflix Inc.
U.K. Investment
In a statement, Netflix said: “Netflix is a significant contributor to the UK economy – investing $6bn over the last four years and working with over 50,000 cast and crew and 200+ producers to produce British content such as Adolescence, Baby Reindeer and Black Doves that is loved the world over. We’re committed for the long term and invest more here than any other country except the US.”
Netflix’s results contradict previous studies on U.K. viewership. They have revealed how Brits are trying to enhance their viewing experience without the ‘annoyance’ of adverts during runs of their favourite shows.
A recent report in the U.K. found that Brits are spending £5 billion a year just to avoid adverts on major streaming services.
The Finder report found that over 31 million UK adults pay for premium, ad-free subscriptions across Netflix, Amazon (AMZN) Prime, Disney (DIS) + and Spotify (SPOT).
Good news on the surface for streaming providers but perhaps storing up a problem over the long-term if advertisers begin to feel snubbed.
Overall, however, Netflix feels optimistic about the future. In the group’s Q2 earnings last month, it increased its full-year revenue guidance to $44.8 billion to $45.2 billion, up from the prior guide of $43.5 billion to $44.5 billion.
This further bolstered the Netflix stock price – see above – which has soared over 30% this year.
Is NFLX a Good Stock to Buy Now?
On TipRanks, NFLX has a Moderate Buy consensus based on 25 Buy, 11 Hold and 1 Sell ratings. Its highest price target is $1,600. NFLX stock’s consensus price target is $1,395.19, implying a 16.61% upside.
