Netflix Flags Heavier 2026 Content Spend, Pressuring Margins As WBD Deal Overhang Drags On Stock

The streaming giant will debut new content types, such as vertical video podcasts, and plans to roll out a new mobile user experience later in 2026.

• Netflix stock drops by over 5% in after-hours trading.
• Streaming giant’s Q4 revenue and profit, Q1 revenue forecast, and FY 2026 revenue forecast top Wall Street’s expectations.
• Netflix will increase content spending by 10% this year, investing in major shows, licensing deals, and new content formats. 

Netflix, Inc. plans to increase spending on content programming and acquisitions by about 10% this year to nearly $20 billion, even as it pursues the acquisition of Warner Bros. Discovery, Inc.’s studio and streaming assets – moves that have left some investors uneasy about higher costs weighing on profitability.

Netflix shares were down 5.1% in Tuesday’s after-market session. Up till the last close, they had already fallen 35% from their June peak. 

The streaming giant amended its WBD offer to an all-cash deal for $27.75 per share, with the same $82.7 billion value, in a bid to sweeten the deal and fend off a challenge from Paramount Skydance. Netflix previously offered $23.25 per share in cash, with the remainder in Netflix stock.

Content Push

Meanwhile, executives forecast continued content investment across a broad slate, including series, films, live events, and new formats like video podcasts. This year’s slate includes returning hits such as “Bridgerton” season 4 and “One Piece” season 2; new series such as “Something Very Bad” and “The Boroughs”; and programming from expanded licensing deals with Sony, Universal, and Paramount.

Netflix will also debut new content types, such as video podcasts (in vertical video feed), and plans to roll out a new mobile user experience later in 2026.

Margins Pressure, Deal Risks

Although the streaming giant’s 2026 revenue growth forecast of 12% to 14% – including a doubling of ad revenue from $1.5 billion last year – beat Wall Street’s estimates, its profit view was weak. The company’s operating margins forecast of 31.5% was below the 32.5% consensus expectation, CFRA Research analysts said in a post-results note.

The research firm said that Netflix’s WBD deal faces significant regulatory approval and execution risks that may extend beyond the 12-18 month timeline, although it does not expect Netflix to withdraw given the steep $5.8 billion breakup fee.

Gary Black, managing director at the Future Fund LLC, said the all-cash deal implies a quicker close, likely by April, and limited equity overhang, although the analyst expects that Paramount would raise its WBD offer for $30 per share as it pushes to clinch the deal. 

Netflix’s fourth-quarter revenue and profit came in higher than estimates. Its Q1 revenue forecast was slightly shy of estimates, while its profit view exceeded expectations. Notably, Netflix said it is pausing its share buyback.

Retail Says ‘Generational’ Buying Opportunity

On Stocktwits, retail sentiment NFLX climbed multiple points higher in the ‘extremely bullish’ zone, with the 24-hour message volume rising by over 1,200%. Several users posted an upbeat view on the company’s dominant position, growth, and strategy, adding that any further dip in the stock is a buying opportunity.  

“NFLX easiest buy of the year,” a user said, while another commented: “Netflix is starting to remind me of Meta. It was hated to extremes. $70 dip will be a generational level.”

Netflix shares closed at $87.26 on Tuesday and are down 7% year to date.<

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