Netflix surpasses revenue expectations with 325 million subscribers

• Netflix's 2026 full-year revenue forecast of $50.7-$51.7 billion fell short at the low end of analyst estimates of $50.98 billion
• December viewership rose 10% driven by the final season of 'Stranger Things' (15 billion viewing minutes) and two NFL games on Christmas Day
• The company secured a $59 billion bridge loan and increased it by $8.2 billion to support the all-cash Warner Bros acquisition, which will add major franchises like 'Harry Potter' and 'Game of Thrones' to its content library

Netflix Surpasses Revenue Expectations with 325 Million Subscribers

Financial Performance:

Netflix exceeded Q4 revenue expectations, reporting $12.1 billion for October-December versus analyst forecasts of $11.97 billion. The streaming giant surpassed 325 million subscribers. However, its 2026 full-year revenue guidance of $50.7-$51.7 billion fell slightly below analyst estimates of $50.98 billion at the low end. The company reported adjusted per-share earnings and announced share buybacks would be paused.

Growth Drivers:

Nielsen data showed Netflix's monthly viewership jumped 10% in December, driven primarily by the final season of "Stranger Things" (15 billion viewing minutes), two NFL games on Christmas Day, and the third "Knives Out" film. Ad revenue is projected to roughly double in 2026.

Major M&A Activity:

Netflix is pursuing an $82.7 billion all-cash acquisition of Warner Bros Discovery's studio and entertainment assets, competing against a hostile bid from Paramount Skydance. The deal includes Warner Bros' film/TV studios, content library, and major franchises like "Game of Thrones," "Harry Potter," and DC Comics superhero properties.

Netflix secured a $59 billion bridge loan commitment on December 4, later increased by $8.2 billion to $67.2 billion to support the revised all-cash offer of $27.75 per share. Co-CEO Ted Sarandos stated the all-cash structure enables a faster stockholder vote with greater financial certainty.

Market Reaction:

Analyst Ross Benes of eMarketer noted investor skepticism about the Warner Bros acquisition's value, contributing to recent stock declines. He expects M&A developments to overshadow quarterly results for upcoming quarters, though Netflix maintains a stronger debt position than most entertainment competitors.