Key Points
- Netflix is set to report its fourth-quarter earnings on Tuesday.
- Investors’ focus is on the company’s ongoing bid for Warner Bros. Discovery.
- Netflix’s stock is down 28% since its last earnings report, partly due to concerns about the deal.
- The company is expected to report a 28% increase in earnings and a 17% rise in revenue.
Netflix is set to report its fourth-quarter earnings on Tuesday, but for most investors, the numbers will be a sideshow. The main event is the ongoing “love triangle” for control of Warner Bros. Discovery, a high-stakes battle that has put Netflix in the spotlight and made its investors very nervous.
The streaming giant has been in a bidding war with Paramount for Warner Bros. ‘ studio and streaming business. Netflix recently sweetened its offer to an all-cash deal of $82.7 billion. While this has given its stock a small boost, the whole saga has been a major drag on the company’s shares, which are down 28% since its last earnings report in October.
Many investors are worried about the high price tag and the risks of such a massive acquisition, especially for a company that hasn’t historically grown through big deals. “It’s hard to imagine someone wants to buy this versus AI winner stories right now,” said one trader.
But others see the recent selloff as a buying opportunity. “I’m positive whether the deal goes through or not,” said one chief investment officer.
The earnings report itself is expected to be solid. Netflix is projected to report a 28% increase in earnings and a 17% rise in revenue. The company had a blockbuster content lineup in the fourth quarter, including the finale of a hit sci-fi series, a major boxing match, and NFL games over Christmas.
Analysts will be closely watching the company’s 2026 guidance, especially its forecast for new subscribers. One analyst expects Netflix to have added 14.2 million new subscribers in the quarter, which is above the consensus estimate.
No matter how good the numbers are, the Warner Bros. deal will likely dominate the conversation. The outcome of that battle will have a much bigger impact on Netflix’s future than any single quarterly report.
