Netflix ( NASDAQ:NFLX ) reported strong fourth quarter results that beat Wall Street estimates on revenue and earnings per share.
Here are five key things investors need to know to start the trading day.
During the company's earnings call, Netflix CEO Ted Sarandos said the company was working hard to close the acquisition of Warner Bros.' streaming and studios business, calling it “a strategic accelerant.
1. Netflix's Business Model Under Fire Despite Q4 Beat Netflix beat Q4 earnings estimates but the stock dropped 7% anyway, revealing what Wall Street really cares about: future growth, not past performance.
The streaming giant still dominates, but growth is slowing and getting more expensive.
"YouTube is not just user-generated content and cat videos anymore," Netflix CEO Ted Sarandos said on Tuesday.
Netflix Inc (NASDAQ:NFLX, XETRA:NFC) shares fell more than 5% in after-hours trading on Tuesday, wiping $19 billion off the company's market value, after the streaming giant issued a weaker-than-expected forecast for the first quarter. The stock looks set to extend losses when markets open in New York.
Netflix is upgraded to a "Buy" after a sharp ~30% decline from peaks eliminates prior valuation concerns, despite Q1 guidance modestly missing consensus. NFLX's $72 billion all-cash offer for Warner Bros. would push leverage to ~5x EBITDA, but bridge funding is secured and synergies are expected. Access to Warner's studios should enable NFLX to streamline costs, produce more originals in-house, and enhance long-term profitability.
Netflix's revenue growth rate accelerated in Q4. The company's paid subscriber count recently crossed 325 million.
Netflix, Inc. (NFLX) Q4 2025 Earnings Call Transcript
As YouTube, TikTok, and Instagram continue to dominate mobile viewing, Netflix is rethinking how its app fits into a social-first video landscape. During its fourth-quarter earnings call on Tuesday, the company announced plans to revamp its mobile app and expand its short-form video feature, which it mentions could help promote the new slate of original video podcasts it unveiled last week.