Netflix shares drop despite positive Q4 earnings
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The news: Netflix exceeded Wall Street's revenue expectations in the fourth quarter of 2025, reporting revenue of USD12.1 billion ($18 billion), an increase of 18% year-on-year and ahead of forecasts of USD11.97 billion. Full year 2025 revenue rose 16% from the prior corresponding period to USD45 billion.
Fourth quarter operating income came in at USD3 billion, up 30% year-on-year.
Shares fell 4.8% to USD82.91 per share in extended trading after the results were announced.
The context: Data from analytics company Nielsen show Netflix's monthly viewership surged 10% in December, driven by the final season of sci-fi series Stranger Things, which generated 15 billion viewing minutes. Netflix also surpassed 325 million subscribers globally.
Netflix reported adjusted earnings of 56c per share for the fourth quarter ended in December, slightly above analyst estimates of 55c. The company forecast continued growth in 2026, with revenue of between USD50.7 billion to USD51.7 billion. Netflix said advertising revenue is expected to roughly double.
Investors remained focused on Netflix's proposed all-cash acquisition of Warner Bros at USD27.75 ($41.23) per share, replacing a previously proposed USD72 billion cash-and-stock deal.
In its latest shareholders note, Netflix said the acquisition would provide broader and higher-quality selection of movies and shows for its subscribers, and allow for more personalised and flexible subscription offerings through the addition of HBO Max.
