Netflix is poised to report its fourth quarter 2025 financial results and business outlook post-market on Tuesday, Jan 20, 2026.

Netflix's Q4 revenue is expected to be $11.96 billion, rising 16.7% compared to the last year. Net income grew to $2.369 billion, or $0.55 per share, up 28% from a year ago, according to Bloomberg's consensus expectation.

Source: Bloomberg

Things to Watch in 4Q Earnings

Netflix Set for Strong Finish Despite Warner Noise

Netflix delivered a solid set of results in its Q3 earnings, reporting double-digit year-on-year revenue growth and a further expansion in operating margin.

That Q3 performance sets the backdrop for Q4, which is typically a seasonally strong quarter for the platform due to holiday viewing and a heavier content slate.

The biggest focus will be on whether 2026 guidance falls short of consensus for a 13% revenue gain, which would exacerbate structural growth concerns especially in light of the Warner transaction.

In December, Netflix announced that it would acquire Warner Bros, which will take months to close. The acquisition would bring HBO Max onto the Netflix platform. Subscribers would access a broader content inventory (such as House of the Dragon series and The Last of Us).

This strategic move is accretive. First, it would consolidate the customer base, strengthening the NFLX leadership position in the global streaming market. Second, both could rely on their resources to develop high-quality content at lower budgets, improving efficiency. Lastly, this would also enhance NFLX's pricing power in the long term.

Advertising Business Takes Centre Stage

The advertising segment will be a primary focus of the Q4 report, signifying a substantial evolution in Netflix's operational framework. In the third quarter, the company highlighted ongoing growth in the adoption of its ad-supported tier and enhanced monetization as it advanced the deployment of its proprietary advertising technology. Consensus for 10.7 million adds in 4Q, but company no longer discloses subscribers.

Netflix likely posted a solid 4Q given its blockbuster content lineup, which included the finale of "Stranger Things," "Jake Paul vs. Anthony Joshua" and NFL Christmas games.

Stranger Things 5 was split into three separate releases. Since the debut of Volume 1 in late November, it has generated 8.46 billion minutes of viewership in the first week, reaching a new record. Volume 2 was launched on Christmas Day and New Year's Eve. We saw numerous plot speculations, creating viral memes on social media. We can expect that these content-related commercials and marketing efforts added additional tailwind to its top-line growth.

The fourth-quarter results should offer clearer evidence on whether advertisers increased their spending on the platform during the crucial holiday season and if ad revenue is expanding in alignment with management's long-term strategic goals.

A key 2026 topic will be progress on the advertising front, with calculations suggesting $4-$5 billion, after it likely doubled in 2025.

Margins and Cash Generation Under Scrutiny

Profit margins and cash flow will also face intense examination as investors evaluate the quality of Netflix's earnings growth. Management guided a strong 4Q FY2025 outlook, implying both growth and margin expansion. Netflix may have a chance to beat consensus this time, sending shares higher. Management projects 29% operating margin in 2025, and analysts estimate just over 32% in 2026.

For the fourth quarter, the market will be looking for confirmation that this margin enhancement is durable and that free cash flow remains robust, especially considering typically higher seasonal expenditures on marketing and content. Company forecast for 2025 free Cash Flow of $9 Billion (Raised From $8-8.5 Billion) vs. $6.9 Billion in 2024

Any announcements regarding capital allocation strategies, including potential share repurchases, would likely be met with a positive market response.

Analysts' Opinions

TD Cowen has lowered its price target on Netflix to $115 from $142 while maintaining a Buy rating. TD Cowen’s annual advertising buyer survey indicates Netflix is experiencing increased advertiser adoption for its ad-supported tier, representing a potential growth avenue for the company.

Deutsche Bank reiterates Netflix as hold. Deutsche said whatever happens with the company’s deal for Warner Bros will drive shares of Netflix.

Morgan Stanley slashed the price target on Netflix to $120 from $150, maintaining an Overweight rating on the stock. The firm stated that the media and entertainment industry is heading into 2026 with “solid fundamental momentum”.