Netflix (NFLX) reported better-than-expected fourth-quarter earnings after the close on Tuesday, but said it would ramp up new content in the coming year and pause its stock repurchase program in light of its upcoming acquisition of Warner Bros. Discovery (WBD).
The streaming giant reported revenue of $12.05 billion, topping Wall Street expectations of $11.96 billion and in line with the company’s own forecast, according to Bloomberg consensus data. In the fourth quarter of last year, the company’s revenue was $10.25 billion.
Earnings per share came in slightly higher than expected, at $0.56, compared with Wall Street’s forecast of $0.55. This compares to Netflix’s $5.45 estimate, which was $0.55 after the 10-for-1 stock split in mid-November.
The company also revealed that it currently has more than 325 million members worldwide.
Full-year revenue was $45.2 billion, slightly above expectations, while Wall Street forecast $45.1 billion, a 16% increase for the full year. Netflix said on Tuesday that it expects revenue to fall between $50.7 billion and $51.7 billion in 2026, up 12%-14%.
Netflix expects first-quarter revenue to grow 15.3% to $12.16 billion, with adjusted earnings of $0.76. That beat Wall Street expectations of $10.54 billion, with adjusted earnings of $0.66.
Its slower growth suggests the company will seek to increase the rollout of its own content in the coming year, while uncertainty over the Warner Bros. deal weighed on the stock, which fell 5% in after-hours trading on Tuesday.
Netflix said in its shareholder letter that engagement in the second half of the year was driven by a 9% increase in viewing of its original content, but was offset by a decline in engagement for non-branded content.
“This decline primarily reflects lower volumes of licensed, second-run content in most territories due to the extension of the 2023 to 2024 licensing period due to the WGA strike temporarily shutting down new production,” the company said in the letter.
“As catalogs grow, costs rise, live formats expand, and experience and acquisitions reshape expectations, breadth is no longer a simple advantage; it’s a more complex liability. The real work now is to transform breadth into something coherent, adaptable, and resilient enough to define the next era of the industry,” Frank Albarella, head of KPMG’s U.S. media and telecoms group, told Yahoo Finance after the report was released.
