Netflix had a busy Tuesday, reporting strong financial results while also fighting a massive battle to acquire Warner Bros. Discovery. The company beat Wall Street’s expectations for both revenue and earnings during the holiday quarter. However, investors reacted nervously, sending the stock price down by more than 4% in after-hours trading.
The drop in share price comes as Netflix ramps up its $82.7 billion bid to take over Warner Bros. To stay ahead of a rival offer from Paramount Skydance, Netflix changed its proposal to an all-cash deal. If successful, Netflix would own massive franchises like Harry Potter, Game of Thrones, and the DC superhero universe. Co-CEO Ted Sarandos said the cash offer makes the deal more certain and helps speed up the process.
Despite the high cost of the bidding war, the core business looks healthy. Netflix brought in $12.1 billion in revenue over the last three months, beating the $11.97 billion analysts predicted. Profits also landed slightly ahead of expectations. The service added millions of new members, officially crossing the 325 million paid subscriber mark.
Huge content releases drove this growth. The final season of Stranger Things racked up 15 billion viewing minutes in December alone. Netflix also branched out into live sports, streaming two NFL games on Christmas Day. It released the third movie in the popular Knives Out series.
Looking forward to 2026, Netflix predicts it will bring in around $51 billion in revenue. A major part of that plan involves advertising. The company expects to double its ad revenue to $3 billion by offering new formats, like interactive ads. Netflix is also pushing deeper into live events outside the U.S., such as the World Baseball Classic in Japan. It is launching video podcasts featuring stars like Pete Davidson. To manage this global expansion, the company is opening new operations centers in the UK and Asia.
While the bidding war for Warner Bros is expensive, leadership believes these big moves are necessary for long-term survival in the competitive streaming world.
