Netflix recently released its financial results for the fourth quarter of 2025. Surprisingly, even with solid numbers, investors are not feeling great. The stock fell 4.9%, closing at $87.26, and it continues to drop after hours.
In its shareholder letter, Netflix announced a halt to its share buyback program. This decision aims to strengthen its cash position, especially while negotiating its acquisition of Warner Bros. Discovery. Originally, the deal included both cash and Netflix stock, but the updated agreement is now entirely cash-based, valued at $27.75 per share.
For Q4 2025, Netflix reported $12.05 billion in revenue, beating expectations of $11.97 billion. Earnings per share (EPS) also exceeded forecasts, coming in at $0.56 instead of the anticipated $0.55. Looking ahead, management estimates revenue for 2026 will grow to between $50.7 billion and $51.7 billion, reflecting a 12% to 14% increase from the previous year.
Experts suggest that despite the pause in buybacks, the financial health Netflix showcased in Q4 could provide opportunities for investors. With its stock trading at 39 times operating cash flow, this is notably lower than its five-year average of 59.2 times. This could mean that now is a good time for long-term investors to consider buying back in.
Interestingly, on social media, some users express skepticism. They point out that while the company shows growth, the lack of aggressive stock buybacks leaves doubts about short-term strategies. The contrast between impressive financial results and market reactions highlights the complex relationship between investor sentiment and corporate decisions.
In summary, Netflix’s strong financial performance contrasts with the mixed reactions from investors. With forward-looking projections and current stock pricing, there remains potential for growth, even if the path to regain investor trust may take time.
For further insights on Netflix’s financial health and stock performance, you can explore detailed analyses from trusted sources like Reuters.
