Key Points:
- Investors await Netflix earnings, focusing on content spending and ad growth.
- Netflix faces tougher competition after its failed bid for Warner Bros Discovery.
- Expected Q1 revenue increase of 15.5%, with $634 million from advertising.
- Netflix is expanding live programming to boost ad revenue and subscriptions.
Investors will closely watch Netflix when it reports quarterly earnings on Thursday. They expect the streaming giant to highlight content spending and growth in its advertising business as key drivers. This marks Netflix’s first earnings report since its unsuccessful bid for Warner Bros Discovery.
Buying Warner Bros would have given Netflix a collection of valuable franchises like “Game of Thrones” and “Friends” without the expensive process of creating its own. Instead, the company will now face tougher competition from a combined Warner Bros and Paramount Skydance, if that proposed $110 billion deal closes.
Netflix is expected to announce a 15.5% increase in revenue for the first quarter, reaching $12.18 billion, with $634 million coming from advertising. These figures come from analysts surveyed by LSEG. The company raised U.S. prices in March, which some analysts believe could lead Netflix to increase its full-year revenue forecast. This price increase might also encourage more users to switch to its ad-supported tier, though revenue from this tier is still small.
Netflix shares have already gained 13% this year. The stock is up about 26% since the company decided to walk away from the $72 billion Warner Bros deal. Investors now expect Netflix to shift its focus towards sports and other live events as it aims to boost ad revenue.
John Belton, a portfolio manager at Gabelli Funds, which owns Netflix shares, stated, “We’re kind of entering another phase for the ad business, where they are becoming one of the largest scaled global advertising platforms.”
During the quarter, the company expanded its live programming lineup. A concert by K-pop supergroup BTS, streamed from Seoul, was a highlight, attracting 18.4 million viewers worldwide. The 2026 World Baseball Classic also became the most streamed baseball game globally. These events show Netflix’s push into live content to draw in more subscribers and advertising dollars.
