"Tuesday after the bell, the company mostly (and modestly) beat fourth-quarter 2025 expectations, hit 325 million paid memberships, and laid out an aggressive 2026 plan - including sharply higher margins - but the stock fell close to 5% after hours, underscoring how tightly the company's future is tied to ad growth and a looming Warner Bros. Discovery deal. The numbers are clean. The narrative isn't."
"Because while Netflix's latest earnings report delivered the usual markers of success - growth, profit, scale - the subtext was about what happens when a streaming giant starts behaving less like a disruptor and more like a consolidator with a side business to build. While Netflix's long-term margin story strengthened, near-term costs get heavier first - including higher content amortization and deal-related expenses that are front-loaded into early 2026. So the destination may be attractive, but the path to get there looks bumpy."
"Revenue came in at $12.1 billion, up 17.6% year over year, and a one-cent beat of $0.56 per share; net income came in at $2.42 billion, and operating margin was 24.5% for the quarter. Netflix also reaffirmed its longer-range posture, guiding to $50.7 billion-$51.7 billion in 2026 revenue and a 31.5% operating margin, even after acquisition-related costs. On paper, that's the profile of a company that believes it has matured into a durable cash machine."
Netflix reported Q4 2025 revenue of $12.1 billion, up 17.6% year over year, net income of $2.42 billion, and operating margin of 24.5%, while hitting 325 million paid memberships. The company modestly beat EPS by one cent and reaffirmed 2026 targets of $50.7–$51.7 billion revenue and a 31.5% operating margin after acquisition costs. Netflix presented an aggressive 2026 plan with sharply higher margins, but guided Q1 2026 revenue and EPS below Street expectations. Near-term costs will rise due to higher content amortization and front-loaded deal-related expenses, increasing short-term volatility. Investor focus on ad growth and a potential Warner Bros. Discovery deal intensified market skepticism.
Read at Quartz
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