Netflix shares fell more than 5% in after-hours trading on Tuesday, even after the streaming giant reported fourth-quarter earnings that exceeded Wall Street expectations. The company posted a profit of $2.4 billion (€2.05 billion), or 56 cents per share, marking a 29% year-on-year increase. Revenue rose 18% to over $12 billion (€10.24 billion).
The results also highlighted that Netflix ended 2025 with more than 325 million subscribers worldwide, adding roughly 23 million during the year. While this represents solid growth, it is a significant slowdown from the 41 million new subscribers added in 2024. The slower pace has amplified investor concerns that Netflix’s subscriber growth may be peaking, following the launch of its low-priced, ad-supported plan in 2022.
Looking ahead, Netflix projected a challenging first quarter in 2026, with earnings expected to fall short of analysts’ forecasts. Management also said the company would halt share buybacks while pursuing its acquisition of Warner Bros Discovery. Revenue growth for 2026 is expected to slow to between 12% and 14%, compared with 16% last year, despite ad sales projected to double. Content spending is expected to rise by about 10%, with an additional $275 million (€234.57 million) linked to the Warner Bros deal.
The Warner Bros takeover has become a central focus for Netflix. On Tuesday, the company converted its original stock-and-cash offer into an all-cash bid, aiming to simplify the process and counter a competing proposal from Paramount. Warner Bros has reaffirmed its commitment to completing the Netflix deal, but Paramount has indicated it may continue to challenge the acquisition. The rival company has threatened to nominate directors to Warner’s board and filed a lawsuit demanding fuller disclosure of the Netflix agreement.
During a conference call, Netflix co-CEO Ted Sarandos signaled the company’s readiness to face competition. “We are no strangers to competition and we are no strangers to change,” he said, recalling how Netflix successfully navigated rivalries with Walmart and Blockbuster during its DVD-by-mail era.
Analysts said Netflix faces multiple hurdles, including winning shareholder approval, fending off Paramount, and convincing US regulators that adding HBO content to its platform will not harm competition. The stock has fallen roughly 20% since the Warner Bros deal was announced last month. AJ Bell financial analyst Danni Hewson noted that while Netflix’s all-cash bid shows its determination, the bidding war could continue, with Paramount potentially making a counteroffer.
The outcome of the takeover, combined with slowing subscriber growth and rising content costs, is likely to keep investors cautious. “Netflix doesn’t want to overpay, but it also doesn’t want to be bested in this race for content domination,” Hewson said, reflecting the delicate balance the company faces as it seeks to expand its streaming empire.
