Netflix delivered solid financial results for the fourth quarter of 2025 but saw its stock dip as investors digested mixed signals from the company’s outlook and strategic moves.
Strong Revenue and Subscriber Growth
Netflix reported Q4 2025 revenue of $12.05 billion, representing about 18 % year‑over‑year growth and slightly exceeding Wall Street expectations. Earnings per share came in at $0.56, beating consensus estimates, while net income rose nearly 30 % from the prior year.
The company also crossed 325 million global paid subscribers, a key milestone driven by popular seasonal content and new hit releases like Stranger Things Season 6 and The Crown Season 7. Analysts noted that international growth continues to be a key driver, with the Asia-Pacific region contributing nearly 20 % of total subscriber additions.
Ad Revenue Momentum
Netflix’s advertising business showed strong growth, exceeding $1.5 billion for the full year, more than double the prior year. Management highlighted the success of targeted ad tiers, which now account for nearly 12 % of total subscribers in North America and Europe.
Looking ahead, Netflix expects ad revenue could nearly double again in 2026 as the company expands its ad offerings and experiments with dynamic pricing models for premium placements. This positions Netflix as one of the few streaming platforms effectively balancing subscription and advertising revenue streams.
Stock Reaction and Market Concerns
Despite strong top-line performance, Netflix stock fell roughly 5 % in after-hours trading following the earnings release. Market participants expressed concern over slowing subscriber growth, cautious guidance for 2026, and uncertainties surrounding Netflix’s all-cash acquisition proposal for Warner Bros. Discovery (WBD).
The revised acquisition offer of $27.75 per share for WBD stock adds another layer of uncertainty, with regulatory hurdles and financing implications contributing to mixed sentiment among investors. Analysts also caution that potential debt financing could weigh on Netflix’s balance sheet if the deal proceeds.
