Netflix in its earnings statement said that it is pausing its share buybacks to accumulate cash to help fund the pending acquisition of Warner Bros.
- The streaming giant posted an adjusted profit of $0.56 per share, slightly above analyst estimates of $0.55 per share, according to data from fiscal.ai.
- Netflix said its Ad revenue is expected to roughly double in 2026.
- It forecasted 2026 revenue of $50.7 billion to $51.7 billion.
Shares of Netflix (NFLX) fell more than 4% in extended hours of trading on Tuesday as its fourth quarter profit came just slightly above estimates and it paused its share buyback in bid to accumulate cash to fund its deal for Warner Bros.
Investors continue to focus on the pending acquisition of Warner Bros Discovery, after both firms announced an amended agreement earlier in the day.
Q4 Results
The streaming giant posted an adjusted profit of $0.56 per share, slightly above analyst estimates of $0.55 per share, according to data from fiscal.ai. Its fourth quarter revenue came at $12.05 billion which was also above analyst projection of $11.97 billion.
Netflix forecasted continued growth in 2026, with revenue expectations of $50.7 billion to $51.7 billion. Ad revenue is expected to roughly double, Netflix said in a statement.
“We also made great progress growing advertising revenue. In 2025, which was only our third year selling advertising, ad revenue grew by more than 2.5 times vs. 2024 to over $1.5 billion,” it said.
Pauses Buybacks For WBD Deal
Netflix said it is pausing its share buyback program to accumulate cash to help fund the pending acquisition of Warner Bros.
“We first prioritize reinvestment in the business, both organically and through selective M&A, while maintaining liquidity and then returning excess cash to shareholders through share repurchases. Consistent with that framework, we’ll pause our share buybacks to accumulate cash to help fund the pending acquisition of Warner Bros,” it said.
During the quarter, Netflix repurchased 18.9 million shares for $2.1 billion, leaving $8 billion remaining under its existing share repurchase authorization plan.
Tweaks Deal For WBD
Netflix and Warner Bros earlier in the day said they have amended their agreement to acquire WBD into an all-cash deal, as they try to fend off Paramount Skydance’s hostile bid.
In a joint announcement, the companies said that the transaction is valued at $27.75 per share, unchanged from the previous offer. However, the previous agreement offered WBD shareholders $23.25 in cash. The new agreement offers WBD shareholders $27.75 per share in cash.
“The WBD Board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community,” Netflix co-CEO Ted Sarandos said.
How Did Stocktwits Users React?
Retail sentiment around NFLX trended in ‘extremely bullish’ territory amid ‘extremely high’ message volume.
One Stocktwits user said, "Netflix make it cheaper to acquire shares. Warner Bros. Transaction is immediately accretive to earnings”.
Another user said “Markets are forward-looking; investors are worried that the massive growth seen in 2025 (driven by the password-sharing crackdown) is finally beginning to plateau”.
Shares in the company have fallen 7.3% year-to-date.
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