Netflix Reports Q4 2025 Earnings: Revenue Surges 18% to $12.05 Billion, Surpasses 325 Million Subscribers

Rhea-AI Summary

Netflix (NASDAQ: NFLX) reported Q4 2025 results with revenue of $12.05 billion, up 18% year‑over‑year, and net income of $2.42 billion (diluted EPS $0.56, +31% YoY). Operating income rose to $2.96 billion and operating margin expanded to 24.5%. Free cash flow for Q4 was $1.87 billion, while full‑year 2025 revenue reached $45.2 billion (+16% YoY) with $9.5 billion in free cash flow and a 29.5% operating margin. Memberships surpassed 325 million paid members. Advertising revenue exceeded $1.5 billion in 2025 with management expecting ~$3 billion in ad revenue for 2026. Netflix amended its merger agreement with Warner Bros. Discovery to an all‑cash deal at $27.75 per WBD share and has $42.2 billion in bridge facility commitments to support the acquisition. The company paused share buybacks and ended Q4 with $9.0 billion in cash.

Positive

• Q4 revenue of $12.05B (+18% YoY)
• Operating income of $2.96B (+30% YoY)
• Full‑year 2025 revenue $45.2B (+16% YoY)
• Free cash flow growth: Q4 $1.87B (+36%); FY $9.5B (+37%)
• Paid memberships exceeded 325 million
• Advertising revenue > $1.5B with ~$3B target for 2026

Negative

• Share buybacks paused to conserve cash for Warner Bros. acquisition
• Bridge facility commitments of $42.2B increase financing reliance
• Q4 cash balance of $9.0B versus large acquisition funding needs
• Acquisition amended to all‑cash $27.75 per WBD share, increasing transaction size

Market Reaction

-5.08% $82.83 2.9x vol

15m delay 7 alerts

-5.08% Since News

$82.83 Last Price

$82.73 $89.90 Day Range

-$21.34B Valuation Impact

$398.73B Market Cap

2.9x Rel. Volume

Following this news, NFLX has declined 5.08%, reflecting a notable negative market reaction. Our momentum scanner has triggered 7 alerts so far, indicating moderate trading interest and price volatility. The stock is currently trading at $82.83. This price movement has removed approximately $21.34B from the company's valuation. Trading volume is elevated at 2.9x the average, suggesting increased selling activity.

Data tracked by StockTitan Argus (15 min delayed). Upgrade to Silver for real-time data.

Key Figures

Q4 2025 Revenue: $12,051 million Q4 2025 Operating Income: $2,957 million Q4 2025 Diluted EPS: $0.56 +5 more

8 metrics

Q4 2025 Revenue $12,051 million +18% YoY, 1% above guidance

Q4 2025 Operating Income $2,957 million +30% year over year

Q4 2025 Diluted EPS $0.56 +31% vs Q4 2024

Full-Year 2025 Revenue $45.2 billion +16% YoY, +17% F/X neutral

Full-Year 2025 Free Cash Flow $9.5 billion vs $6.9 billion in 2024

Paid Memberships 325 million+ Crossed milestone in Q4 2025

WBD All-Cash Offer $27.75 per share Amended Warner Bros. Discovery merger terms

Bridge Facility Commitments $42.2 billion Senior unsecured bridge term loans for all-cash WBD deal

Market Reality Check

Price: $87.05 Vol: Volume 92,059,348 is 2.43...

high vol

$87.05 Last Close

Volume Volume 92,059,348 is 2.43x the 20-day average of 37,899,863, indicating elevated pre-earnings positioning. high

Technical Shares at 87.053 are trading 35.09% below the 52-week high of 134.115 and remain below the 200-day MA at 113.08, despite solid earnings metrics.

Peers on Argus

NFLX traded slightly down (-0.06%) on heavy volume while peers were mixed: DIS +...

NFLX traded slightly down (-0.06%) on heavy volume while peers were mixed: DIS +0.63%, FOX +0.20%, NWS -0.03%, WBD -0.84%, LYV -1.41%, pointing to stock-specific factors rather than a broad entertainment move.

Historical Context

5 past events · Latest: Jan 07 (Positive)

Pattern 5 events

Date	Event	Sentiment	Move	Catalyst
Jan 07	Acquisition update	Positive	+0.1%	Netflix supports WBD board reaffirmation of merger agreement and terms.
Jan 07	Governance / deal	Positive	+0.1%	WBD board urges rejection of rival offer, backing merger with Netflix.
Dec 22	Competing bid news	Negative	-1.2%	Paramount amends superior all-cash offer for WBD, challenging Netflix deal.
Dec 17	Competing bid news	Neutral	+0.2%	Paramount reiterates commitment to superior $30 per share offer for WBD.
Dec 17	Acquisition announcement	Positive	+0.2%	Netflix welcomes WBD board recommendation and details terms of WBD deal.

Pattern Detected

Recent Netflix headlines tied to the Warner Bros. Discovery transaction have produced modest but consistently aligned price reactions, with deal-supportive news coinciding with small gains and competing bids coinciding with mild pressure.

Recent Company History

Over the last few weeks, news flow has centered on Netflix’s proposed acquisition of Warner Bros. Discovery. On Dec 17 and Dec 22, competing Paramount offers for WBD introduced deal uncertainty, while Netflix-backed merger announcements on Dec 17 and reaffirmations on Jan 7 highlighted a cash-and-stock agreement at $27.75 per WBD share with an equity value of $72.0B. Price reactions around these items were small but generally aligned with whether headlines supported or challenged the Netflix–WBD combination, framing today’s earnings and revised all-cash structure against an ongoing M&A backdrop.

Market Pulse Summary

The stock is down -5.1% following this news. A negative reaction despite strong Q4 numbers would con...

Analysis

The stock is down -5.1% following this news. A negative reaction despite strong Q4 numbers would contrast with the generally aligned pattern seen around prior WBD deal headlines, where news and price tended to move together. Investors had data on $12.051B in Q4 revenue, a 29.5% full-year operating margin, and $9.5B in free cash flow, alongside an amended all-cash $27.75-per-share WBD offer supported by $42.2B in bridge commitments. Any downside could have reflected concerns about integration complexity, leverage from financing, or expectations embedded before the print.

Key Terms

bridge loan financing, senior unsecured bridge facility, revolving credit facility, delayed draw term loan facility, +4 more

8 terms

bridge loan financing financial

"Net income included approximately $60 million of costs related to the Warner Bros. bridge loan financing."

A bridge loan is a short-term loan companies use to cover an immediate cash gap until longer-term financing, a sale, or other funding is arranged. Think of it as a temporary bridge over a river: it keeps operations moving but often costs more and carries tighter repayment terms than permanent loans. For investors, bridge financing matters because it can signal urgent funding needs, affect cash flow and interest burden, and sometimes lead to dilution or higher risk if long-term financing is uncertain.

senior unsecured bridge facility financial

"On December 4, Netflix obtained commitments for a $59 billion senior unsecured bridge facility."

A senior unsecured bridge facility is a short-term loan that a company takes to cover immediate cash needs until it secures longer-term financing; “senior” means this debt has priority over other unsecured obligations for repayment, and “unsecured” means it is not backed by specific collateral. For investors, it signals a temporary funding solution that affects a company’s liquidity and interest costs and can influence future dilution or credit risk if longer-term financing must be restructured.

revolving credit facility financial

"entered a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility"

A revolving credit facility is a type of loan that a business can borrow from whenever it needs money, up to a set limit. It’s like having a credit card for companies—allowing them to borrow, pay back, and borrow again as needed, providing flexibility for managing cash flow or funding short-term expenses.

delayed draw term loan facility financial

"a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility"

A delayed draw term loan facility is a committed loan that a borrower can tap in one or more installments at specified future times after meeting agreed conditions, rather than receiving the full amount upfront. For investors it matters because it provides a ready source of cash that can change a company’s financial strength, leverage and interest costs when drawn—similar to having a reserved credit line you can use later, which affects liquidity and the risk profile of the business.

reverse termination fee regulatory

"a $5.8B reverse termination fee payable by Netflix if regulatory approvals tied to antitrust or foreign laws are not obtained."

A reverse termination fee is a cash payment the would-be buyer agrees to pay the target if the buyer fails to close a merger or acquisition for specified reasons, such as losing financing or failing to obtain approvals. Think of it like a breakup fee the buyer agrees to pay as compensation for the seller’s lost time and missed opportunities; investors watch it because it signals deal certainty, potential cash recovery if a deal collapses, and shifts financial risk between the parties.

rule 10b5-1 trading plan financial

"The activity was conducted under a Rule 10b5-1 trading plan adopted on February 10, 2025."

A Rule 10b5-1 trading plan is a pre-arranged schedule that allows company insiders to buy or sell stock at specific times, even if they have inside information. It helps prevent accusations of unfair trading by making these transactions look planned and transparent, rather than sneaky or illegal.

performance-based restricted stock units financial

"reflecting performance-based restricted stock units that were deemed earned and will settle one-for-one"

Performance-based restricted stock units are a type of employee equity award that converts into company shares only if predefined financial or operational targets are met over a set period. Think of it like a bonus check that becomes stock only when specific goals are hit; it ties pay to results, aligning managers’ incentives with shareholders. Investors care because these awards affect future share count, executive incentives, and signal how management’s success will be measured and rewarded.

form 144 regulatory

"has filed a Form 144 indicating an intent to sell 23,439 shares of common stock"

Form 144 is a document that investors must file with the government when they plan to sell a large number of shares of a company's stock. It helps ensure transparency so everyone knows how many shares are being sold and when, which can impact the stock's price.

AI-generated analysis. Not financial advice.

LOS GATOS, Calif., January 20, 2026 – Netflix, Inc. (NASDAQ: NFLX) today reported financial results for the fourth quarter and full year ended December 31, 2025, announcing that it met or exceeded all of its financial objectives for the year. The company also confirmed that its merger agreement with Warner Bros. Discovery has been amended to an all-cash transaction valued at $27.75 per WBD share.

Q4 2025 Financial Highlights

Fourth quarter revenue grew 18% year over year (+17% on a foreign exchange neutral basis) to $12.05 billion, driven primarily by membership growth, higher pricing, and increased advertising revenue. Despite unfavorable F/X movements during the quarter, revenue exceeded guidance by 1% due to stronger-than-forecasted membership growth and ad sales.

Operating income reached $2.96 billion in Q4, up 30% year over year, with operating margin expanding two percentage points to 24.5%. Diluted earnings per share amounted to $0.56 versus $0.43 in Q4 2024, representing a 31% increase. Net income included approximately $60 million of costs related to the Warner Bros. bridge loan financing.

Key Q4 2025 metrics:

• Revenue: $12,051 million (+18% YoY, +17% F/X neutral)
• Operating Income: $2,957 million (+30% YoY)
• Operating Margin: 24.5% (+2.3 percentage points YoY)
• Net Income: $2,419 million (+29% YoY)
• Diluted EPS: $0.56 (+31% YoY)
• Free Cash Flow: $1,872 million (+36% YoY)
• Net Cash from Operating Activities: $2,112 million

Full Year 2025 Performance

Netflix grew full-year revenue 16% to $45.2 billion (+17% on a F/X neutral basis) and increased operating margin to 29.5%, up from 26.7% in 2024. The company generated $10.1 billion of net cash from operating activities and $9.5 billion of free cash flow, compared to $7.4 billion and $6.9 billion respectively in 2024.

Advertising revenue grew more than 2.5x versus 2024 to over $1.5 billion in only the company's third year selling advertising.

Full Year 2025 quarterly breakdown:

• Q1 2025: Revenue $10,543M, Operating Margin 31.7%, Diluted EPS $0.66
• Q2 2025: Revenue $11,079M, Operating Margin 34.1%, Diluted EPS $0.72
• Q3 2025: Revenue $11,510M, Operating Margin 28.2%, Diluted EPS $0.59
• Q4 2025: Revenue $12,051M, Operating Margin 24.5%, Diluted EPS $0.56
• Full Year: Revenue $45,183M, Operating Margin 29.5%, Diluted EPS $2.53

Membership and Engagement

Netflix crossed the 325 million paid memberships milestone during Q4 2025, now serving an audience approaching one billion people globally. In the second half of 2025, members watched 96 billion hours on Netflix, up 2% (+1.5 billion hours) year over year. Viewing of branded originals increased 9% year over year in H2 2025.

According to Nielsen, Netflix's share of US TV time reached an all-time high of 9.0% in December 2025, up 0.5 percentage points year over year. Linear TV still comprises over 40% of US TV screen time.

Regional Revenue Breakdown (Q4 2025)

• United States & Canada (UCAN): $5,339 million (+18% YoY)
• Europe, Middle East & Africa (EMEA): $3,873 million (+18% YoY, +15% F/X neutral)
• Latin America (LATAM): $1,418 million (+15% YoY, +20% F/X neutral)
• Asia-Pacific (APAC): $1,421 million (+17% YoY, +19% F/X neutral)

Q4 2025 Content Performance

The company's strong Q4 branded slate included top-performing titles:

Returning Series: Stranger Things final season (120M views), Nobody Wants This S2 (31M), Emily in Paris S5 (41M), Selling Sunset S9 (11M), Record of Ragnarok S3 from Japan (13M), and Culinary Class Wars S2 from Korea (10M).

New Series: The Beast in Me from the US (48M), The Asset from Denmark (24M), Rulers of Fortune from Brazil (23M), and Last Samurai Standing from Japan (22M).

Films: Guillermo del Toro's Frankenstein (102M), A House of Dynamite (78M), Wake Up Dead Man: A Knives Out Mystery (66M), Caramelo from Brazil (54M), Champagne Problems (52M), My Secret Santa (51M), Troll 2 from Norway (47M), A Merry Little Ex-Mas (40M), Jay Kelly (21M), and Train Dreams (20M).

Documentaries: Sean Combs: The Reckoning (54M), The Perfect Neighbor (50M), Being Eddie (12M), and Babo from Germany (7M).

Stand-up Specials: Dave Chappelle: The Unstoppable... (17M), Kevin Hart: Acting My Age (13M), Matt Rife: Unwrapped - A Christmas Crowd Work Special (8M), Ricky Gervais: Mortality (7M), Leanne Morgan: Unspeakable Things (5M), and Tom Segura: Teacher (5M).

Note: A view is defined as hours viewed divided by runtime for each title. Views are based on the first 91 days since release.

Live Programming

Live events continued to drive engagement, with Anthony Joshua's knockout of Jake Paul attracting a 33 million average minute audience (Live+1) and NFL Christmas Day games generating significant viewership.

In 2026, Netflix will stream all 47 games of the World Baseball Classic live in Japan and expand its live slate with Star Search (featuring live fan voting), Skyscraper Live, and three Major League Baseball events including an exclusive Opening Night game and the Home Run Derby.

2026 Guidance

For 2026, based on F/X rates as of January 1, 2026, Netflix forecasts:

• Revenue: $50.7 billion to $51.7 billion (+12% to +14% YoY, or +11% to +13% F/X neutral)
• Operating Margin: 31.5% (up 2 percentage points from 2025)
• Free Cash Flow: Approximately $11 billion
• Advertising Revenue: Expected to roughly double versus 2025

The 2026 margin forecast includes approximately $275 million of acquisition-related expenses and reflects content amortization growth of approximately 10%, with higher growth in the first half than the second half due to title launch timing.

Q1 2026 Forecast

• Revenue: $12,157 million (+15.3% YoY)
• Operating Income: $3,906 million
• Operating Margin: 32.1%
• Net Income: $3,264 million
• Diluted EPS: $0.76

Warner Bros. Acquisition Update

Netflix and Warner Bros. Discovery announced today that they have amended their merger agreement to an all-cash transaction valued at $27.75 per WBD share, replacing the previous mix of cash and Netflix stock. The revised transaction structure expedites the timeline to a WBD shareholder vote and provides greater certainty of value.

The acquisition includes Warner Bros. film and television studios, HBO Max, and HBO. Netflix has obtained $42.2 billion in bridge facility commitments to support the transaction. On December 4, Netflix obtained commitments for a $59 billion senior unsecured bridge facility. On December 19, the company entered a $5 billion senior unsecured revolving credit facility and a $20 billion senior unsecured delayed draw term loan facility, reducing bridge commitments to $34 billion. On January 19, 2026, bridge facility commitments were increased by $8.2 billion to support the change to an all-cash transaction.

Netflix anticipates reductions to these bridge facility commitments through a combination of future bond offerings and accumulated cash. WBD filed a preliminary proxy statement with the SEC on January 20, 2026.

Strategic Rationale for Warner Bros. Acquisition

Netflix believes the acquisition will accelerate its business strategy through two main opportunities: First, Warner Bros.' library, development, and IP will provide broader and higher-quality content selection for members. Second, the addition of HBO Max will enable more personalized and flexible subscription options.

The combined company will expand production capacity in the US and abroad and grow investment in original content over the long-term, creating jobs and sustaining a healthy entertainment industry.

Content and Licensing Partnerships

Netflix announced expanded licensing partnerships including:

• Universal: New US licensing partnership for live action films, complementing existing animated films deal with Illumination and DreamWorks Animation
• Paramount: Approximately 20 shows licensed including Matlock, King of Queens (international), Seal Team, Watson, and Mayor of Kingstown (US and international)
• Sony Pictures: Expanded pay 1 film pact from US to global, marking the first time a distribution service will premiere theatrical films in the pay 1 window simultaneously on a global basis, with full global availability by early 2029

Games and Innovation

Netflix launched cloud-delivered TV-based party games to approximately one-third of members, including Boggle, Pictionary, Lego Party, and Tetris. The company will expand its cloud games lineup in 2026 with titles including a newly reimagined FIFA football simulation game.

The company continues to harness AI to enhance member experience, support creative teams, and improve advertising capabilities. In 2025, Netflix began testing AI tools to help advertisers create custom ads based on Netflix IP and introduced automated workflows for ad concepts and campaign planning.

Product Updates

In 2025, Netflix rolled out a redesigned TV experience with new UI capabilities to support video podcasts, live events, and games. In 2026, the company will innovate on product features including live voting, Moments, phone-as-controller gaming, real-time personalized recommendations, thematic title collections, and vertical video experiences on mobile.

Netflix's editorial site Tudum reached a record 23.4 million visits in December and 232 million total visits in 2025, up 18% from the prior year. Netflix Houses opened in Dallas, TX and King of Prussia, PA.

Capital Structure and Balance Sheet

As of December 31, 2025:

• Cash and Cash Equivalents: $9.0 billion
• Gross Debt: $14.5 billion
• Net Debt: $5.5 billion
• Total Assets: $55.6 billion
• Stockholders' Equity: $26.6 billion
• Content Assets (net): $32.8 billion
• Total Streaming Content Obligations: $24.0 billion

During Q4 2025, Netflix repurchased 18.9 million shares for $2.1 billion, leaving $8.0 billion remaining under its existing share repurchase authorization. The company will pause share buybacks to accumulate cash for the pending Warner Bros. acquisition while maintaining a solid investment grade rating.

Stock Split

All share and per share amounts have been retroactively adjusted to reflect the ten-for-one forward stock split effected on November 14, 2025.

Long-Term Stock Performance

Netflix reported its long-term stock performance as of December 31, 2025:

• 1 Year: NFLX +5% vs S&P 500 +18%
• 3 Year Annualized: NFLX +47% vs S&P 500 +23%
• 5 Year Annualized: NFLX +12% vs S&P 500 +14%
• 10 Year Annualized: NFLX +23% vs S&P 500 +15%
• Since IPO (May 23, 2002): NFLX +33% annualized, +87,409% cumulative return

2026 Content Slate Preview

Returning Series: Bridgerton S4, ONE PIECE S2, The Night Agent S3, BEEF S2, One Hundred Years of Solitude S2 (Colombia), Avatar: The Last Airbender S2, Outer Banks S5 (series finale), The Hunting Wives S2, Berlin S2 (Spain), The Gentlemen S2 (UK), 3 Body Problem S2, The Diplomat S4, Nobody Wants This S3, Lupin Part 4 (France), Running Point S2, and Virgin River S7.

New Scripted Series: Something Very Bad Is Going to Happen and The Boroughs from the Duffer brothers, Pride & Prejudice (UK), Man on Fire, Can This Love Be Translated (Korea), Little House on the Prairie, Human Vapor (Japan), East of Eden starring Florence Pugh, Operation Safed Sagar (India), Will Ferrell's untitled golf series, Detective Hole (Norway), The Altruists (Sam Bankman-Fried limited series), Radioactive Emergency (Brazil), and Courtney A. Kemp's Nemesis.

Films: People We Meet on Vacation, The Rip starring Ben Affleck and Matt Damon, Peaky Blinders: The Immortal Man starring Cillian Murphy, Greta Gerwig's Narnia, Apex starring Charlize Theron, animated feature Steps, The Swedish Connection (Sweden), 72 Hours with Kevin Hart, Here Comes the Flood (Denzel Washington/Robert Pattinson heist caper), Office Romance starring Jennifer Lopez and Brett Goldstein, Quasimodo (France), and Enola Holmes 3.

Earnings Interview

A live video interview will be available on youtube/netflixir at 1:45pm PT today featuring Co-CEOs Greg Peters and Ted Sarandos, CFO Spence Neumann, and VP of Finance & Capital Markets Spencer Wang.

About Netflix

Netflix is one of the world's leading entertainment services with over 325 million paid memberships in over 190 countries enjoying TV series, films, and games across a wide variety of genres and languages.

Investor Relations Contact

Lowell Singer, VP, Investor Relations: 818 434-2141

Media Contact

Emily Feingold, VP, Corporate Communications: 323 287-0756

FAQ

What were Netflix's key Q4 2025 financial results (NFLX)?

Netflix reported Q4 2025 revenue $12.05B, net income $2.42B, and diluted EPS $0.56.

How many paid members did Netflix have at the end of 2025 (NFLX)?

Netflix surpassed 325 million paid memberships as of December 31, 2025.

What guidance did Netflix give for full‑year 2026 revenue and margin (NFLX)?

Netflix forecasted 2026 revenue of $50.7B–$51.7B (12%–14% growth) and an operating margin of 31.5%.

What did Netflix announce about the Warner Bros. Discovery acquisition (NFLX)?

Netflix amended the merger to an all‑cash transaction at $27.75 per WBD share and secured $42.2B in bridge facility commitments.

How is Netflix funding the Warner Bros. acquisition and what is the capital impact (NFLX)?

Netflix obtained $42.2B in bridge facility commitments, paused share buybacks, and had $9.0B in cash at quarter end.

What is Netflix's outlook for advertising revenue in 2026 (NFLX)?

Management expects advertising revenue to grow to approximately $3 billion in 2026, about double 2025 levels.