Strong Quarterly Results Amidst Slowing Growth

Netflix concluded 2025 with impressive performance, reporting revenue and earnings that exceeded Wall Street expectations. However, the reports also indicated a slowdown in new subscriber growth. The company ended the year with over 325 million worldwide subscribers, an increase of approximately 23 million from the previous year, leading some investors to worry that organic growth potential is reaching a plateau.

The All-In Bet on Warner Bros. Discovery

The primary story occupying the market is Netflix’s attempt to take over Warner Bros. Discovery. The move is designed to integrate HBO Max’s extensive content library and Warner’s movie studios under the Netflix umbrella. The shift in deal structure—from a mix of cash and stock to an all-cash transaction—requires the company to maintain very high liquidity. Since the intention to acquire was announced in December, Netflix stock has lost about 20% of its value due to investor concerns regarding high costs, Warner’s heavy debt load, and potential regulatory hurdles.

Freezing the Indirect Dividend and 2026 Outlook

The management’s announcement of a pause in share buybacks was viewed as a major disappointment by investors, who are accustomed to receiving value through the reduction of outstanding shares. Nevertheless, Netflix issued an optimistic outlook for 2026, projecting revenue between $50.7 billion and $51.7 billion, representing year-over-year growth of 12% to 14%. Some analysts argue that despite the current pressure, the stock is trading at an operating cash flow multiple lower than its five-year average, which could represent a buying opportunity.