Netflix recently shared its fourth quarter earnings, revealing stronger-than-expected results. The streaming giant reported revenue of $12.05 billion, surpassing Wall Street’s prediction of $11.96 billion. This is an impressive jump from last year’s $10.25 billion revenue in the same quarter.
The earnings per share came in at $0.56, slightly above the anticipated $0.55. After a significant stock split last November, this performance reflects Netflix’s robust financial management.
With over 325 million members worldwide, Netflix continues to expand its reach. Overall revenue for the year hit $45.2 billion, which is higher than the forecast of $45.1 billion, marking a remarkable 16% growth.
Looking ahead, Netflix anticipates revenues of $50.7 billion to $51.7 billion in 2026, indicating continued growth despite a slower pace. For the first quarter of the upcoming year, it expects 15.3% revenue growth, projecting $12.16 billion in earnings.
However, the company plans to increase its content rollout while pausing its share repurchase program due to its ongoing acquisition of Warner Bros. Discovery. This comes amid uncertainties about the deal, causing a 5% dip in stock in after-hours trading.
Netflix’s recent report highlighted that engagement in the second half of the year was boosted by a 9% increase in viewing of its original content. In contrast, there was a drop in engagement with licensed content, largely due to fewer new productions during a recent writers’ strike.
CFO Spencer Neumann stated that higher content expenses are likely in the first half of 2026 as they build off last year’s smaller base. Frank Albarella from KPMG emphasized the challenges that come with expanding catalogs and increasing production costs. He noted the importance of transforming content into something sustainable and engaging for viewers.
The acquisition of Warner Bros. Discovery is a critical move for Netflix. Initially valued at around $72 billion, it was amended to an all-cash deal at $27.75 per share. This deal includes various film and streaming assets, while Paramount has made a competing offer for a broader range of assets.
As for pricing strategies, co-CEO Gregory Peters assured that there are no immediate plans to increase subscription costs. Netflix is also committed to maintaining the traditional 45-day window for Warner Bros. films before they go to streaming.
Overall, Netflix is positioning itself for future growth while navigating challenges in the media landscape. Understanding its current trajectory can provide insights into the evolving streaming market.
For further insights on Netflix’s financial strategies, you can refer to their official shareholder letter.
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Netflix, Warner Bros, Earnings per share, share repurchase
