Netflix, Inc. 8-K

PositiveEarningsNew guidance

Warner Bros. deal shifts to all cash; buybacks will pause to build cash for the acquisition.

Filed 2026-01-20 16:07 ET

Summary

Q4 and FY2025 results with Q1 and FY2026 guidance, alongside an all-cash Warner Bros. acquisition amendment. Q4 revenue rose 18% Y/Y, driven by membership growth, higher pricing and increased ad revenue; Netflix passed 325M paid memberships during the quarter. Netflix amended the pending Warner Bros. deal to an all-cash transaction at $27.75 per WBD share.

Key Figures

Metric Q4 2025 FY2025
Revenue $12.1B, +17.6% Y/Y $45.2B, +16% Y/Y
Operating income $2.96B, +30% Y/Y $13.3B, +28% Y/Y
Operating margin 24.5%, vs 22.2% 29.5%, vs 26.7%
Net income $2.42B, +29% Y/Y $11.0B, +26% Y/Y
Diluted EPS $0.56, +30% Y/Y $2.53, +28% Y/Y
Net cash provided by operating activities $2.11B, +37% Y/Y $10.1B, +38% Y/Y
Non-GAAP free cash flow $1.87B, +36% Y/Y $9.46B, +37% Y/Y
  • Q4 operating income and margin were slightly ahead of forecast, primarily due to revenue upside. Full-year ad revenue grew more than 2.5x to over $1.5B; second-half viewing hours rose 2% Y/Y, with branded-original viewing up 9%.
  • Q4 share repurchases were $2.1B for 18.9M shares; weighted-average diluted shares fell 1.4% Y/Y to 4.32B from 4.38B. Netflix ended the quarter with $9.0B cash and $14.5B gross debt, and said it will pause buybacks to accumulate cash for the acquisition.
  • The amended deal is valued at $27.75 per WBD share, all cash. Netflix increased aggregate bridge facility commitments to $42.2B to support the transaction. Q4 net income included ≈$60M of bridge-financing-related costs in interest expense.

Guidance

Metric Period Guidance Prior Direction
Revenue Q1 2026 $12.157B; +15.3% Y/Y — —
Operating income Q1 2026 $3.906B — —
Operating margin Q1 2026 32.1% — —
Net income Q1 2026 $3.264B — —
Diluted EPS Q1 2026 $0.76 — —
Revenue FY2026 $50.7B-$51.7B; +12%-14% Y/Y, +11%-13% F/X-neutral — —
Advertising revenue FY2026 ≈2x FY2025 — —
Operating margin FY2026 31.5% — —
Non-GAAP free cash flow FY2026 ≈$11B — —

The FY2026 revenue outlook reflects membership and pricing growth and expected ad-revenue doubling. The margin target includes ≈$275M in acquisition-related expenses and reflects content amortization growth of ≈10%, with higher growth in H1 than H2. The FCF estimate assumes no material foreign-exchange swings.

Investor Takeaways

  • Watch Q1 revenue and operating margin against the forecast, with membership, pricing and ad sales driving delivery.
  • FY2026 revenue, margin and FCF will show whether Netflix sustains growth while funding its content and acquisition plans.
  • WBD shareholder approval, regulatory approvals and completion of the Discovery Global separation remain key steps toward closing the acquisition.

The summary is written by an AI model reading the filing.

Model 005 · prompt 8bef31e277 · 2026-10-14 16:48:06Z

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