Core Insights - Netflix demonstrated solid financial performance in the last year despite a slowdown in subscriber growth, highlighting the significance of its $72 billion bid for Warner Bros.' movie studio and HBO Max integration into its streaming lineup [1] Financial Performance - In the fourth quarter, Netflix surpassed stock market analysts' projections, ending the year with over 325 million global subscribers, adding approximately 23 million subscribers since 2024 [2] - The 2025 subscriber increase of 23 million represents a significant slowdown compared to the 41 million added in 2024, raising concerns among investors about potential peak growth since the introduction of a low-priced, ad-supported service in 2022 [3] - The company reported a profit of $2.4 billion, or 56 cents per share, marking a 29% increase from the previous year, while revenue rose 18% to over $12 billion [5] Future Projections - Management forecasted a profit for the January-March period that fell below analysts' expectations and announced a halt to stock buybacks while pursuing the Warner Bros. deal [4] - Despite expectations of doubling ad sales, Netflix projected revenue growth to decline from 16% in 2025 to 12% to 14% in the current year, indicating a challenging start to the year [4] Strategic Moves - Netflix shifted its original bid for Warner Bros. from a stock component to an all-cash deal to simplify the process and make it more appealing to Warner Bros. Discovery shareholders amid competition from Paramount [6] - Co-CEO Ted Sarandos emphasized Netflix's experience with competition during a conference call, referencing past rivalries with Walmart and Blockbuster, indicating the company's readiness to adapt to changes in the industry [7]

Core Insights - Netflix missed earnings expectations due to a significant tax dispute in Brazil, breaking a six-quarter streak of exceeding analyst projections [1][2] - The company reported a net income of $2.5 billion, or $5.87 per share, representing an 8% year-over-year increase, while revenue rose 17% to $11.5 billion, matching analyst forecasts [4][5] Financial Performance - The unexpected $619 million expense related to the Brazilian tax dispute contributed to the earnings shortfall [2] - Despite the earnings miss, Netflix's revenue growth indicates an increase in its worldwide subscriber count from approximately 302 million at the end of last year [9] Market Reaction - Following the earnings report, Netflix's shares fell about 6% in extended trading, indicating investor concerns despite the revenue meeting expectations [3][8] - Analysts expressed mixed views, with some highlighting potential signs of a slowdown in subscriber growth, while others maintained confidence in Netflix's underlying business model [4][7] Strategic Direction - Netflix has shifted its focus from subscriber growth to delivering solid financial performance, ceasing the disclosure of subscriber numbers since the end of last year [7] - The company is diversifying its content offerings by adding live sports and video games, with plans to expand into video podcasts from Spotify next year [12] Audience Metrics - Netflix co-CEO Ted Sarandos stated that the total worldwide audience, including multiple individuals in the same household, is approaching 1 billion [10][11]