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Netflix On Tuesday, it announced that the number of paying members worldwide has reached 325 million. This marks another milestone for the streaming giant, which last announced membership numbers a year ago.
The company reported fourth-quarter profits and sales that narrowly beat Wall Street expectations. Here’s how Netflix performed for the period ended December 31 compared to the expectations of analysts surveyed by LSEG.
Earnings per share: 56 cents vs. 55 cents, estimated revenue: $12.05 billion vs. $11.97 billion, estimated
Net income for the fourth quarter was $2.42 billion, or 56 cents per share, up from $1.87 billion, or 43 cents per share, in the year-ago period.
Netflix said its revenue increased 18% year-over-year in the same period due to membership growth, higher subscription prices and higher advertising revenue. In recent years, Netflix has focused on expanding its ad-supported membership.
Netflix launched an ad-supported option at the end of 2022. On Tuesday, it announced that advertising revenue in 2025 will increase more than 2.5 times compared to 2024, reaching more than $1.5 billion.
The company said it expects total revenue in 2026 to be in the range of $50.7 billion to $51.7 billion, due to growth in membership and pricing, as well as “advertising revenue expected to approximately double in 2026” compared to the previous year.
During an earnings call with investors on Tuesday, Netflix leaders said competition among peers is increasing when it comes to attracting subscribers and increasing profitability.
“As we head into 2026, we are focused on improving our core business, and we will do that by increasing the diversity and quality of our series and films,” said co-CEO Ted Sarandos.
Still, Netflix stock fell more than 4% in after-market trading on Tuesday.
Netflix’s report drew comparisons to an April Wall Street Journal report that outlined the company’s ambitious internal financial goals. By these high standards, Netflix’s growth has been underwhelming.
But co-CEO Greg Peters said Tuesday that internal targets are considered “long-term aspirations” and should not be confused with forecasts.
“That being said, these goals are based on an organic process,” Peters added, noting that the impact of mergers and acquisitions was not taken into account.
WBD trading updates
Netflix’s quarterly report comes on the back of Warner Bros. Discovery’s plans to trade its streaming and film studio assets. The company announced in December that it had agreed to buy streamer HBO Max and Warner Bros. movie studios for $27.75 per WBD share, or a value of $72 billion.
Early Tuesday, Netflix amended its offer to all cash. The company announced Tuesday it would suspend stock buybacks to fund acquisitions.
Netflix said in a letter to shareholders that it believes the deal “allows us to accelerate our business strategy.”
Netflix told Warner Bros. The libraries, developments, and intellectual property will enhance content selection for members, which HBO Max says will help it “offer more personalized and flexible subscription options.”
But the proposed acquisition shocked the market, as the streaming giant had long shied away from industry consolidation and big deals. The company’s stock price has fallen nearly 30% since October, when it was first rumored that Netflix was interested in the asset.
And potential acquisitions have been fraught with challenges. Immediately after announcing the deal with Netflix, Paramount Skydance began a hostile effort to acquire all of WBD. Lawmakers and industry officials have also raised questions about whether the partnership with Netflix will win the necessary regulatory approvals.
“We are working hard to complete the acquisitions of Warner Bros. Studios and HBO, and we view this as a strategic accelerator,” Sarandos said on a Tuesday call. “And we do all this while driving and sustaining healthy growth.”
Sarandos said Netflix has begun the regulatory process, adding that he is confident the company can secure regulatory approval “because this is a pro-consumer, pro-innovation, pro-worker deal.”
The company has repeatedly maintained that the merger will preserve jobs at a time of mass layoffs across the media. Sarandos said Tuesday that the Warner Bros. assets would give Netflix additional business that it doesn’t already have.
“We’re going to need a team, people with a lot of experience and expertise. We want them to stay and run the business,” Sarandos said. “That’s why we’re expanding content production, not scaling back, with this transaction.”
Sarandos and Peters discussed the high level of competition in the media industry, which they said spans a variety of platforms from traditional television to social media platforms such as YouTube.
CNBC previously reported that proving that Netflix is just one part of a growing competitive landscape could be key to Netflix’s case with antitrust regulators.
