What’s the top line? Netflix increased its revenue by 16% in 2025 to $45.2bn, as it surpassed 325 million paying subscribers in Q4. Ad income rose 150% to $1.5bn in 2025, and in an earnings call, Netflix CEO Greg Peters said he expected ad revenue to double again in 2026, to $3bn. But shares in Netflix fell after the results were released, with investors citing concerns over lower operating margins, which were dragged down by content costs and expenses related to Netflix’s proposed acquisition of Warner Bros (WB).
Any interesting insights? Netflix still needs regulators to approve its acquisition of WB, which explains why, in its letter to shareholders, Netflix stressed that its share of TV viewing ‘remains below 10% in the major markets in which we operate.’
It also explains why Netflix’s other CEO, Ted Serandos, felt compelled to wax on about the competitiveness of the TV industry.
‘There’s never been more competition for creators, for consumer attention, for advertising and subscription dollars,’ he said. ‘TV is not what we grew up on. TV is now just about everything. The Oscars and the NFL are on YouTube. Networks are simulcasting the Super Bowl. Amazon owns MGM. Apple’s competing for Emmys and Oscars. And Instagram is coming next.’
On Netflix’s Damascene conversion over the value of theatrical releases, which it now considers complementary to the streaming business, after getting a look under the hood of WB, Serandos quipped: ‘This is a business, not a religion. Conditions change, and we have a culture that we reevaluate things when they do.’
Peters talked more about advertising. He said that now Netflix has increased a bit more scale in the 12 markets in which it runs ads, the company will focus on improving fill rates while maintaining its CPMs. At the moment, the average revenue per user for subscribers on Netflix’s ad tier is still lower than for those who pay not to see ads.
To close that gap, Peters said that Netflix would make more first-party data accessible to advertisers (in a privacy-safe way, naturally) to ‘enhance the performance of media buys’, and introduce more interactive ad formats. It also began testing modular ads at the end of last year, which allow brands to create ads out of mix-and-match templates, to cater to people’s viewing preferences.
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