Netflix (NASDAQ:NFLX) kept up its strong growth in Q4, despite intensifying competition. Global subscriber growth during the period beat both management's guidance and analysts' average forecast for the key metric. Further, the company guided for more strong growth in Q1.

"Streaming entertainment is a global phenomenon," management said in the company's fourth-quarter shareholder letter after noting that subscribers outside the U.S. crossed 100 million during the period.

Here's a look at the key takeaways from the quarter that investors won't want to miss.

A woman eating popcorn while watching a movie in her living room

Image source: Getty Images.

1. Netflix added nearly 9 million paid members

The streaming-TV company's global subscriber base continued to grow rapidly in Q4. The company added 8.76 million net new subscribers during the period, putting total subscribers at 167.1 million --- up 20% year over year. This was about a million subscribers ahead of both management's guidance and analysts' average estimate. 

2. Average revenue per user rose 9%

While growth in paying members was a key driver for Netflix's impressive 31% year-over-year revenue growth in Q4, the top-line figure was also helped by increasing average revenue per user (ARPU). Thanks to a price increase in the U.S. in the first half of 2019, Netflix's ARPU rose 9% year over year during Q4.

3. Netflix's operating margin widened to 8.4%

The company continued to make progress on its operating margin, with the key profitability metric expanding from 5.2% in the fourth quarter of 2018 to 8.4% in Q4 of 2019. For the full year, Netflix achieved its target of a 13% operating margin -- up 300 basis points from a 10% operating margin in 2018. 

Looking ahead, management said it expects its operating margin to expand by another 300 basis points in 2020.

4. Free cash flow was negative-$1.7 billion

Netflix's free cash flow, or operating cash flow less capital expenditures, was negative-$1.7 billion -- worse than free cash flow of negative-$1.3 billion in the fourth quarter of 2018. Full-year free cash flow was negative-$3.3 billion.

Importantly, management said in its fourth-quarter update that it believes this is "the peak in our annual FCF deficit."

"Our plan is to continually improve FCF each year and to move slowly toward FCF positive," management explained. For 2020 specifically, Netflix guided for free cash flow to be negative $2.5 billion.

5. Tens of millions of households have watched The Witcher

Also worth noting is the success of Netflix's TV series called The Witcher. The all-new release is currently tracking to be the company's "biggest season one TV series ever." Netflix said 76 million member households tuned into the series during its first four weeks of availability.

Netflix expects its robust content slate to continue attracting new customers throughout 2020. Management guided for 7 million new subscribers in Q1 alone.

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