Netflix Earnings: Good or Bad?

The 2025 Q4 earnings season is now in full swing, with a wide variety of companies reporting results in each of the coming weeks. It looks to be another period of positivity, underpinned by a large contribution from the beloved technology sector.

And outside of the big banks, entertainment titan Netflix NFLX reflects one of the biggest releases we’ve seen so far. Netflix shares have largely struggled over recent months, though some of the downside is likely attributable to profit-taking after a big run. It should also be noted that the company split its shares 10-for-1 last year, helping overall liquidity.

But how were the recent results?

Netflix Earnings

Netflix posted solid top-line results, led by continued subscriber momentum. Revenue of $12.0 billion grew nearly 18% year over year and accelerated from recent periods, with total subscriber count eclipsing 325 million.

Subscribers are watching more and more as well, with total view hours in the second half of its FY25 increasing 2% YoY alongside a 9% rise in viewing of its branded originals. Its operating margin also saw a nice improvement, moving to 17.6% vs. 16.0% in the year-ago period.

Additionally, consumers appear to be still receptive to its ad-supported plans, with its ad revenue more than doubling to $1.5 billion from FY24 to FY25. Many were skeptical of the ad-supported plans initially, but they’ve undoubtedly been a hit for consumers, particularly those who want a much cheaper subscription.

Below is a chart illustrating the company’s sales on a quarterly basis.

Importantly, Netflix and WBD also amended their merger agreement, which now provides for an all-cash transaction valued at $27.75 per WBD share, replacing the previous mix of cash and Netflix stock. The revised transaction structure is expected to expedite the WBD shareholder vote, though it’s critical to note that things aren’t ‘finalized’ within the deal overall.

Wrapping Up

The reaction to the Netflix NFLX results wasn’t initially great, though broader results do reflect positivity, both within subscriber count and overall efficiency. Its foray into live sports is a massive opportunity, with the WBD deal reflecting the same.

While the recent price action and reaction to the latest set of results are certainly less-than-ideal, NFLX shares melted higher from 2022 lows, with investors cashing in some profits. The reality remains that the company is still attractively positioned given its growing scale and successful business implementations (ad-supported tiers, live sports).

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This article originally published on Zacks Investment Research (zacks.com).

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