Netflix shares slipped after it posted a 29% lift in net income to US$2.419 billion (A$3.61 billion) in the fourth quarter of 2025 and forecast healthy growth in revenue in 2026.
The video streaming giant said diluted earnings per share (EPS) rose 30% to 56 cents on revenue, which increased 18% to $12.015 billion in the three months ended 31 December 2025 and came in slightly ahead of 55 cents expected.
Net income included about $60 million of costs booked in interest expense related to loans for its planned acquisition of Warner Bros. Discovery (WBD), which it has converted to an all-cash transaction to replace the previous mix of cash and stock.
Revenue grew in the final quarter due mainly to membership growth, higher pricing and increased advertising revenue.
For the full year, net income increased 26% to $10.981 billion and diluted EPS grew 28% to $2.53 on revenue, which rose 16% to $45.183 billion.
Netflix (NASDAQ: NFLX) shares closed down 74 cents (0.84%) at $87.26 in regular trading before the results were announced, capitalising the company at US$398.73 billion ($A595 billion), before easing $4.23 (4.9%) to $83.03 in after-market trading.
Paid members passed 325 million last year.
Members watched 96 billion hours on Netflix in the second half of 2025, up 2% year over year, driven by viewing of original programs due in part to the massive final season of Stranger Things.
“In 2025, we met or exceeded all of our financial objectives,” the company said in a letter to shareholders.
For 2026, Netflix forecast revenue growth of 12-14%, driven by increases in membership and pricing and a projected doubling of advertising revenue, and an operating margin of 31.5% versus 29.5% in 2025.
The company was focused this year on closing its planned acquisition of WBD, in which it is battling Paramount Skydance Corp.
“Our goal is to sustain healthy revenue growth, expand operating profit and margin, and deliver growing free cash flow,” the company said.
Revenue just beat analysts’ forecasts of $11.97 billion for the quarter, according to analysts surveyed by LSEG.
