Topline
Netflix shares tanked sharply in premarket trading Wednesday despite the company’s fourth quarter earnings narrowly beating Wall Street estimates, as the streaming giant projected a major increase in spending this year on movies, TV shows and the impending acquisition of Warner Bros.
Netflix shares fell despite the company narrowly beating Wall Street projection in its Q4 2025 earnings report.
Getty Images
Key Facts
Netflix’s share price fell to $81.33 early Wednesday, dropping more than 6.5% from Tuesday’s close.
The streaming giant said revenue rose 18% year over year to $12.05 billion in Q4—slightly above Wall Street’s $11.97 billion projection—while its earnings per share were 56 cents, narrowly beating the 55 cents forecast.
The streamer’s global subscriber base grew to 325 million, up from 301 million at the end of 2024.
The company, which launched a cheaper ad-supported tier in 2022, said its advertising revenue grew to $1.5 billion, two-and-a-half times more than 2024.
However, its forecasts for the current quarter were below Wall Street estimates as the company plans to boost its spending on TV shows and movies by 10% this year.
Netflix also expects its planned $83 billion deal to acquire Warner Bros. will add $275 million to its spending this year.
What Did The Netflix Ceo Say About The Warner Deal?
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.” Sarandos also addressed potential theatrical releases, saying the company has in its history “debated building a theatrical business,” but it never became a priority. “But now with Warner Bros, they bring a mature, well-run theatrical business with amazing films, and we’re super excited about that addition.” Sarandos also reaffirmed that Warner films will be released in theaters with a 45-day window. The Netflix CEO also heaped praise on the HBO brand, which will be part of the acquisition, saying: “HBO. It is an amazing brand. It says prestige TV is better than almost anything. Customers know it. They love it. They know what it means.”
What To Watch For
Sarandos tried to play down the suggestion that Netflix’s acquisition of Warner Bros. would hurt competition, claiming that the streamer competes with everything from broadcast TV to YouTube and Instagram. “TV is now just about everything. Oscars and the NFL are on YouTube. Networks are simulcasting the Super Bowl on linear TV and streaming. Amazon owns MGM. Apple’s competing for Emmys and Oscars. And Instagram is coming next,” Sarados said. He then added that YouTube is no longer just user-generated content and “cat videos,” noting that it has “full-length films, new episodes of scripted and unscripted TV shows.”
Further Reading
Netflix Revises Warner Bros. Deal To $83 Billion All-Cash Offer To Fend Off Paramount (Forbes)
Source: https://www.forbes.com/sites/siladityaray/2026/01/21/netflix-shares-sink-65-in-premarket-after-earnings-ceo-talks-up-warner-deal/
