Netflix marked a significant moment in its growth story this week, announcing that its global paid subscriber base has climbed to 325 million — the first time the streaming leader has shared updated membership figures in a year. The milestone came alongside a fourth-quarter earnings report that slightly outperformed Wall Street forecasts, reinforcing the company’s steady momentum in a highly competitive streaming market.
For the quarter ending December 31, Netflix posted earnings per share of 56 cents, narrowly topping analysts’ expectations of 55 cents. Revenue reached $12.05 billion, edging past the projected $11.97 billion, according to estimates compiled by LSEG.
Stronger Profits and Rising Revenue
Netflix’s profitability showed notable improvement. Net income rose to $2.42 billion, or 56 cents per share, up from $1.87 billion, or 43 cents per share, a year earlier. The company credited this growth to an 18% year-over-year rise in revenue, driven by subscriber additions, higher subscription prices, and a sharp increase in advertising income.
The ad-supported tier, introduced in late 2022, has become an increasingly important engine of growth. Netflix revealed that advertising revenue in 2025 surged more than two-and-a-half times compared with the prior year, surpassing $1.5 billion.
Looking ahead, the company expects overall revenue in 2026 to land between $50.7 billion and $51.7 billion. Executives pointed to continued membership growth, pricing adjustments, and what they described as a near doubling of ad revenue next year as key drivers.
Competition Heats Up, Strategy Sharpens
Despite the solid financial performance, Netflix shares slipped more than 4% in after-hours trading, reflecting investor caution in an industry where competition is intensifying. On the company’s earnings call, co-CEO Ted Sarandos acknowledged the crowded marketplace but emphasized Netflix’s long-term focus on strengthening its content lineup.
“Our priority is improving the core business by expanding the variety and quality of our series and films,” Sarandos said.
Co-CEO Greg Peters addressed comparisons to ambitious internal targets previously reported by the Wall Street Journal, clarifying that those figures represented long-term aspirations rather than short-term forecasts. He added that the goals were based on organic growth assumptions and did not factor in potential mergers or acquisitions.
A Bold Move: The Warner Bros. Discovery Deal
The earnings update arrived amid major strategic developments. Netflix is pursuing the acquisition of Warner Bros. Discovery’s streaming and studio assets, including HBO Max and the Warner Bros. film studio, in a deal valued at roughly $72 billion. The company recently revised the offer to an all-cash transaction and announced it would pause share repurchases to help fund the acquisition.
Netflix believes the deal will accelerate its content strategy by expanding its library and intellectual property portfolio, while also enabling more personalized subscription options through HBO Max’s platform.
However, the proposed acquisition has surprised the market. Netflix has historically avoided large-scale consolidation, and since rumors of the deal first surfaced, the company’s stock has fallen nearly 30%. The bid has also attracted regulatory scrutiny and competitive challenges, including a rival takeover attempt by Paramount Skydance.
Sarandos expressed confidence that the deal will receive regulatory approval, arguing it benefits consumers, workers, and innovation. He emphasized that Netflix plans to retain Warner Bros.’ creative teams and expand content production rather than reduce it.
Navigating a Crowded Media Landscape
Both Sarandos and Peters underscored that competition now extends far beyond traditional streaming rivals, spanning everything from broadcast television to social platforms like YouTube. Demonstrating that Netflix operates within a vast and fragmented media ecosystem is expected to be central to its case before antitrust regulators.
As Netflix edges ahead on earnings and celebrates a record subscriber base, the company now faces its next test: sustaining growth, navigating regulatory hurdles, and proving that its bold expansion strategy can deliver long-term value in an increasingly complex entertainment world.
