Hitting 325 million paid memberships and generating double-digit revenue growth, Netflix had a lot to celebrate last quarter and in 2025 overall. And as a result, the world’s biggest streamer is heading into the new year with a hopeful forecast. 

In a letter to shareholders and an earnings call yesterday, Netflix spent a lot of time discussing its now all-cash plan to acquire WBD, including insights from co-CEOs Ted Sarandos and Greg Peters on exactly why they want to do it. 

Topping the list of reasons, this acquisition will help Netflix expand its production capabilities in the US; give it access to 100 years of WBD IPs for development; and provide it with a strong TV business. Sarandos and Peters say these assets are all complementary to the streamer’s existing business and should augment its ability to compete for consumer attention.

The competition for eyeballs is brutal today, in large part because of YouTube, and this deal is set to make Netflix a stronger player in the media industry, according to Sarandos. “We’re expanding content creation, not collapsing it,” he said, no doubt alluding to the massive layoffs that have recently played out at bidding rival Paramount after it was acquired by Skydance.

However, despite this bullish leadership tone, the streamer’s stocks were down this morning, in part due to lingering uncertainty around the Warner Bros. deal. 

Here are some key takeaways from the report and earnings call. 

Q4 2025 revenue: US$12 billion, up 17% over the same period last year

Full-year revenue: US$45.2 billion, up 16% compared to 2024

The power of kids: Content for children and YA audiences dominated the charts for Netflix in the second half of 2025, according to its latest Engagement Report, which was released at the same time as the earnings call. Netflix kids originals KPop Demon Hunters (pictured, the streamer’s most successful movie ever, now up to 482 million views), season two of Wednesday (the most-watched season in H2 2025, with 124 million views) and season five of Stranger Things (H2’s second-most-watched season, at 94 million views) were the biggest hits. Other titles that had big viewership were Gabby’s Dollhouse (108 million views across seasons), Peppa Pig (90 million across seasons) and Ms. Rachel (73 million across both seasons).

Netflix highlighted the big audiences kids and family titles drew from from July to December 2025 in its latest Engagement report. Image courtesy of Netflix.

Season one of both Wednesday and Ms. Rachel, and seasons one and two of Stranger Things, also made the top 10 list of most-watched shows in H2.

Fandom focus: The streamer is leaning into delivering for fandoms. It had a strong year, thanks to Stranger Things season five and KPop Demon Hunters, and the hype around those titles brought significant eyeballs to Netflix. That’s something it hopes to replicate, and it’s looking to improve quality and build consumer satisfaction. “Fandom is such a powerful engine for our business because it creates advocates for Netflix,” said Sarandos in the earnings call. So it should come as no surprise that the company wants to acquire Warner Bros., home of legacy IPs like Harry Potter and the DC universe.

Why buy: Sarandos and Peters fielded multiple questions about the acquisition on the earnings call. “It was our default position going in that we were not buyers,” Sarandos emphasized, adding that the strength of WBD’s film and TV studio changed his mind. 

WBD’s theatrical business is an “effective complement” to Netflix’s streaming model, Peters added. “To be super-clear on this point, we have often in our Netflix history debated building a theatrical business. We were busy investing in other areas and it never made our priority cut.” With WBD, Netflix gets a “mature” theatrical business, a strong TV production company and the HBO brand, which “says prestige,” all of which will help the company deliver more films and series to consumers, said Peters. 

Sarandos is confident that all of the necessary regulatory approvals will come, because this purchase is good for everyone, he says. “This deal is pro-consumer, it is pro-innovation, it is pro-worker, it is pro-creator, and it is pro-growth.” 

An optimistic forecast: In Q1 2026, the company expects its revenue to climb to US$12.1 billion, which would be up 15% from Q1 2025. 

What 2026 holds: It’s not all about the WBD purchase. Netflix also plans to stream more live events, launch more in-person experiences, do more with video podcasts, and scale up its cloud-based gaming business. 

Revenue blue skies ahead: The company is predicting its full-year 2026 revenue will be between US$50.7 billion and US$51.7 billion (driven by increased ad revenue), which would be a 12% to 14% increase on 2025. 

Images courtesy of KPop Demon Hunters.