Netflix stock falls after fourth quarter results top forecasts, Warner Bros. deal hangs in the balance

Netflix (NFLX) reported 4th fourth net aft the doorbell connected Tuesday that showed better-than-expected results but said it would ramp up its rollout of caller contented successful the twelvemonth up and intermission its stock repurchase programme fixed its pending acquisition of Warner Bros. Discovery (WBD).

The streaming elephantine reported gross of $12.05 billion, much than Wall Street estimates for $11.96 billion, per Bloomberg statement data, which matched the company's ain forecast. In the 4th fourth of past year, the institution posted gross of $10.25 billion.

Earnings per stock came successful somewhat higher than expected astatine $0.56, versus the Street's forecast of $0.55. That's against Netflix's forecast anticipation of $5.45, oregon $0.55 per stock pursuing the 10-for-1 banal divided successful mid-November.

The institution besides disclosed that it present has much than 325 cardinal members worldwide.

Revenue for the afloat twelvemonth came successful a tick higher than expected astatine $45.2 billion, compared to Wall Street's forecast of $45.1 billion, representing 16% maturation for the year. Netflix said Tuesday that its 2026 revenues are expected to autumn successful a scope of $50.7 cardinal to $51.7 billion, representing 12%-14% growth.

For the archetypal quarter, Netflix is forecasting 15.3% maturation successful gross to $12.16 cardinal and adjusted net of $0.76. That's much than what Wall Street expected of $10.54 cardinal with adjusted net of $0.66.

Its slower maturation complaint signals the institution volition look to summation the rollout of its ain contented successful the twelvemonth ahead, and uncertainty astir the Warner Bros. woody weighed connected the stock, which fell much than 5% successful premarket trading connected Wednesday.

In its shareholder letter, Netflix said engagement successful the 2nd fractional of the twelvemonth was powered by a 9% emergence successful viewing of its archetypal contented but offset by an engagement diminution successful its non-branded content.

"This alteration chiefly reflected a little measurement of licensed, second-run contented crossed astir regions pursuing an elevated play of licensing during 2023-2024 arsenic a effect of the WGA strike, which temporarily unopen down caller production," the institution said successful its letter.

On a telephone with analysts, CFO Spencer Neumann said, "You should spot higher year-over-year contented disbursal maturation successful the archetypal fractional of '26, increasing disconnected of that smaller basal that we had successful the archetypal fractional of past year."

Following the report, Frank Albarella, KPMG US assemblage person of Media & Telecommunications, told Yahoo Finance, "As catalogs grow, costs rise, unrecorded formats expand, and experiences and acquisitions reshape expectations. Breadth is nary longer a elemental advantage; it’s a much analyzable responsibility. The existent enactment present is transforming that breadth into thing coherent, adaptable, and resilient capable to specify the adjacent epoch of the industry.”