The company posted revenue of $12.1 billion for October through December, modestly beating Wall Street’s forecast of $11.97 billion, according to analysts surveyed by LSEG. Netflix also confirmed it has surpassed 325 million subscribers, marking continued growth in its global footprint.
However, Netflix’s full-year outlook for 2026 raised concerns. The company projected $50.7 billion to $51.7 billion in revenue, with the low end falling slightly below analysts’ expectations of $50.98 billion. That outlook, coupled with its escalating bid for Warner Bros. Discovery, weighed on investor sentiment.
Subscriber Growth and Hit Shows Drive Viewership
Netflix’s viewership climbed 10% in December, driven largely by the final season of its blockbuster sci-fi series “Stranger Things,” which generated 15 billion viewing minutes, according to Nielsen. The streamer also expanded its sports and film slate by airing two NFL games on Christmas Day and releasing the third installment of the “Knives Out” franchise.
The company also confirmed it had crossed 300 million subscribers by the end of 2024, highlighting its continued dominance in the streaming market.
Warner Bros. Acquisition Dominates Investor Focus
Investors have been intensely focused on Netflix’s $82.7 billion bid for Warner Bros. Discovery, which Netflix argues will broaden its content library and strengthen its competitive edge. The bid is part of a heated battle with Paramount Skydance, which has launched a hostile counteroffer.
“Investors seem skeptical that the WBD purchase will pay off for them, which has contributed to the stock being down lately,” said Ross Benes, analyst at eMarketer. “Netflix’s debt position is better than most entertainment companies. For the next few quarters, M&A will generally overshadow quarterly results.”
Netflix recently amended its merger agreement into an all-cash offer for Warner Bros.’ studios, content library and major franchises including “Game of Thrones,” “Harry Potter,” and DC Comics’ superheroes like Batman and Superman.
“Our revised all-cash agreement will enable an expedited timeline to a stockholder vote and provide greater financial certainty,” said Netflix Co-CEO Ted Sarandos in a statement.
Financing the Deal and Pausing Buybacks
Netflix disclosed it secured commitments for a $59 billion bridge loan in December to support the Warner acquisition, and recently increased the commitment by $8.2 billion to support its all-cash $27.75 per share offer.
To conserve cash, Netflix said it would pause share buybacks, and has already incurred $60 million in financing-related costs.
Earnings Beat, But Outlook Remains Mixed
For the quarter ended in December, Netflix reported adjusted earnings of 56 cents per share, slightly above the 55-cent estimate.
The company also forecast continued growth into 2026 and said ad revenue is expected to roughly double, signaling a continued shift toward advertising-supported tiers.
As Netflix continues to expand its content library and pursue one of the industry’s largest media acquisitions, investors appear focused more on the long-term implications of the Warner Bros. bid than on quarterly results.