The world’s leading paid streaming service attracted 8.51 million new customers in the final three months of the year, helped by the popularity of hit shows such as “Bridgerton” and “The Queen’s Gambit.” That outpaced Netflix’s own forecast and the 6.06 million projected by Wall Street. But it expects to decelerate to 6 million new subscribers in the current quarter, compared with an average analyst estimate of 7.45 million.

Key Insights

• The latest report included two key milestones for Netflix: The company passed the 200 million-subscriber mark for the first time and said its cash flow will allow it to stop relying on debt to fuel its growth. With $8.2 billion in cash — and a credit line that hasn’t been drawn down — Netflix said it no longer needs external financing. It’s also considering stock buybacks, something it hasn’t done in about a decade.
• Netflix’s growth has ebbed since pandemic lockdowns fueled a boom in sign-ups during the first half of 2020. It added 25.9 million customers in the first six months of that year and has repeatedly warned that the surge would take a toll on growth in subsequent quarters — what it calls the “pull-forward” effect. Still, it found more runway than expected in the latest period.
• Netflix is leaning more on international markets now that its home market of North America is largely saturated. The service has relied on Europe and Latin America to supply most of its new customers in the last few years, but has yet to crack much of Asia.

Market Reaction

• Netflix shares climbed as much as 11% to $554.60 in after-hours trading. The stock rallied 67% last year, but concerns about slowing growth have weighed on Netflix in 2021. Through Tuesday’s close, it was down 7.2% since the start of the year.