Netflix reported strong fourth-quarter results, beating most Wall Street expectations. However, the company gave a cautious outlook as it plans to spend more on content and complete its deal with Warner Bros. Discovery.
Netflix said it will increase spending on movies and TV shows by 10% in 2026. Last year, it spent about $18 billion on content and grew its subscriber base by nearly 8%, crossing 325 million users. The company is also moving ahead with its plan to buy Warner Bros.’ studio and streaming business.
Netflix executives said the higher spending is aimed at long-term growth. The company has secured movie rights from Universal and Sony, is expanding into live events and video games, and will launch a new mobile app design later this year.
The Warner Bros. deal will add around $275 million in costs this year, forcing Netflix to pause share buybacks to save cash. Due to higher expenses, Netflix expects near-term profits to be slightly lower. For the current quarter, it forecast earnings of 76 cents per share, below market estimates.
Netflix shares fell over 5% in after-hours trading after the announcement.
Despite slower subscriber growth, Netflix continues to grow revenue by raising prices and expanding its advertising business. The company expects ad revenue to double this year and plans further price hikes in 2026.
For 2026, Netflix expects revenue to grow up to 14%, reaching $51.7 billion, while maintaining strong profit margins.
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