Netflix slightly exceeded Wall Street’s earnings projections for the holiday quarter. However, this led to a 4% drop in stock during after-hours trading, mainly as audiences shifted their attention to the final season of “Stranger Things.”
With over 325 million global subscribers, Netflix’s revenue forecast for 2026 is just above what analysts had anticipated.
Analysts from LSEG reported that Netflix generated $12.1 billion in revenue for the October-December timeframe, surpassing expectations of $11.97 billion.
According to Nielsen, Netflix saw a 10% increase in monthly viewership in December, largely attributed to “Stranger Things.” The final season accrued 15 billion minutes of viewing time. Additionally, Netflix streamed NFL games on Christmas Day and released the third installment of its “Knives Out” mystery series.
By the end of 2024, Netflix had exceeded 300 million subscribers.
Investors are keeping a close eye on Netflix’s $82.7 billion purchase of Warner Bros. Discovery studios and other entertainment assets, particularly as it navigates a potential aggressive bid from Paramount Skydance Inc.
Netflix has revised its merger terms to propose an all-cash offer for the studio, which includes a vast content library and popular franchises like “Game of Thrones,” “Harry Potter,” and DC Comics characters including Batman and Superman.
“This updated cash agreement speeds up the timeline for a shareholder vote and offers enhanced financial stability,” said co-CEO Ted Sarandos in a statement regarding the updated bid.
In a note to investors, Netflix indicated that acquiring Warner Bros. would broaden and enhance its movie and show offerings, while incorporating HBO Max could provide a more tailored and flexible subscription option.
On December 4, Netflix announced it had secured a $59 billion bridge financing deal for the Warner acquisition, which it later increased by $8.2 billion to support its cash offer of $27.75 per share.
In its earnings report, Netflix revealed adjusted earnings of 56 cents per share for the fourth quarter ending in December, slightly beating expectations of 55 cents.
Looking ahead, Netflix anticipates continued growth in 2026, with revenue estimates between $50.7 billion and $51.7 billion. The company also projects that its advertising revenue could roughly double.
