Shares of subscription-streaming service (NASDAQ: NFLX) jumped to two-year highs on Wednesday after the company reported its completed financial results for 2023. The company ended the year with a big surge in growth and higher-than-expected profits. And this is why Netflix stock was up 12% as of 11:20 a.m. ET.

In late 2022, Netflix introduced a subscription tier supported by advertising. And in mid-2023, the company cracked down on users sharing passwords. Both moves seem to have stimulated incredible user growth. It ended 2023 with 260 million paid memberships, an increase of nearly 30 million from the end of 2022. For perspective, it added fewer than 10 million new memberships in 2022.

Thanks to a higher membership base and operational discipline, profits for Netflix skyrocketed. The company had a full-year operating margin of 21% in 2023, up meaningfully from its 18% margin in 2022. Moreover, its free cash flow surged from $1.6 billion in 2022 to a whopping $6.9 billion in 2023.

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Source Fool.com