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Netflix said on Tuesday it had reached 325 million paying subscribers worldwide, a new milestone for the streaming giant which last published its membership numbers a year ago.
The company reported fourth-quarter earnings and revenue that narrowly beat Wall Street estimates. Here is Netflix’s performance for the period ended December 31, compared to estimates from analysts surveyed by LSEG:
- Earnings per share: 56 cents versus 55 cents, estimated
- Income: $12.05 billion versus $11.97 billion, estimated
Fourth-quarter net income was $2.42 billion, or 56 cents per share, compared with $1.87 billion, or 43 cents per share, in the same period a year earlier.
Netflix said its revenue in the period rose 18% year over year, driven by membership growth, higher subscription prices and higher advertising revenue. In recent years, Netflix has focused on increasing its ad-supported membership level.
Netflix launched its ad-supported option in late 2022. On Tuesday, it said 2025 ad revenue grew more than 2.5 times over 2024 to more than $1.5 billion.
The company said it expects overall revenue for 2026 to be between $50.7 billion and $51.7 billion, driven by increased memberships and pricing, as well as “an approximate doubling of advertising revenue in 2026” compared to the previous year.
During Tuesday’s conference call with investors, Netflix executives highlighted what they described as fierce competition among industry peers when it comes to gaining subscribers and increasing profitability.
“As we look at ’26, we’re focused on improving our core business, you know, and we’re doing that by increasing the variety and quality of our series and movies,” said co-CEO Ted Sarandos.
Still, Netflix’s stock was down more than 4% in after-hours trading Tuesday.
Netflix’s report drew comparisons to a Wall Street Journal report from April that outlined ambitious internal financial goals for the streamer. By those lofty standards, Netflix’s growth has been disappointing.
But co-CEO Greg Peters said Tuesday that internal goals are considered “long-term aspirations” and should not be confused with forecasts.
“That said, these goals were based on an organic process,” Peters added, emphasizing that they did not take into account the impact of mergers and acquisitions.
WBD Agreement Update
Netflix’s quarterly report comes against the backdrop of its proposed transaction for Warner Bros. streaming and movie studio assets. Discovery. The company announced in December that it had agreed to acquire streamer HBO Max and film studio Warner Bros. for $27.75 per WBD share, or a net worth of $72 billion.
Earlier Tuesday, Netflix changed its offer to be all cash. The company announced Tuesday that it would suspend its share buybacks to finance the acquisition.
Netflix said in its letter to shareholders that it believes the transaction “will enable us to accelerate our business strategy.”
Netflix said Warner Bros. library, development and intellectual property will allow it to improve its content selection for members and that HBO Max will help “offer more personalized and flexible subscription options.”
However, the proposed acquisition came as a shock to the market, as the streaming giant has long stayed away from industry consolidation and mega-deals. Since October, when interest in Netflix assets was first rumored, the company’s shares have fallen nearly 30%.
And this potential acquisition has not gone smoothly. Shortly after announcing the deal with Netflix, Paramount Skydance launched a hostile move to purchase all of WBD. Lawmakers and industry players have also raised questions about whether the Netflix deal could get the necessary regulatory approval.
“We are working very hard to complete the acquisition of Warner Bros. Studios and HBO, which we view as a strategic accelerator,” Sarandos said on Tuesday’s call. “And we do all of this while driving and maintaining healthy growth.”
Netflix has begun the regulatory process, Sarandos said, adding that he is confident the company will be able to obtain regulatory approval “because this deal is pro-consumer, pro-innovation and pro-worker.”
The company has repeatedly said the merger would preserve jobs at a time of mass media layoffs. On Tuesday, Sarandos said that Warner Bros. assets. would add activities that do not already exist for Netflix.
“We’re going to need these teams, these people who have a wealth of experience and expertise. We want them to stay and run these companies,” Sarandos said. “So we are expanding content creation, not removing it in this transaction.”
Both Sarandos and Peters discussed the high level of competition in the media industry, which they said spans various platforms, from traditional television to social media platforms like YouTube.
Proving that Netflix is only a small part of a larger competitive landscape will likely be key to Netflix’s case to antitrust regulators, CNBC previously reported.