In its fourth quarter, Netflix added 24 million net new subscribers to reach 325 million total, representing an 8% year-over-year increase. The company reported total revenue of $12.05 billion, up 18% from the prior year, driven by both subscription and advertising businesses. Earnings per share grew 30% to $0.56, slightly exceeding the consensus estimate of $0.55, marking the seventh consecutive quarter of EPS upside. Investors will note that subscriber additions were fueled by the finale of a flagship series, which attracted 120 million viewers globally, underscoring Netflix’s continued content pull.

Revenue growth was broad-based across geographies. In the U.S. and Canada, revenue rose 18% to $5.3 billion. Europe, Middle East and Africa also recorded 18% growth to $3.9 billion. Asia-Pacific climbed 17% to $1.4 billion, while Latin America grew 15% to $1.4 billion – up 20% in constant currency terms. The nascent ad-supported tier generated $1.5 billion in revenue, up 150% year over year, and management expects ad revenue to double in the coming year. This shift signals that advertising will become a key incremental growth driver alongside traditional subscription fees and periodic price increases.

For the first quarter, Netflix forecasted revenue growth of 15% with an operating margin of 32.1%. Full-year guidance calls for revenue between $50.7 billion and $51.7 billion – growth of 12% to 14%, below the prior year’s 16% rate – while projecting a full-year operating margin of 31.5%, up from 29.5% in the previous year. The outlook implies a deliberate trade-off: moderating top-line growth as the subscriber base matures, in exchange for enhanced profitability and stronger free-cash-flow generation that could support content spending or strategic investments.

Netflix has entered into an agreement to acquire the film and television studios of Warner Bros. Discovery for a total enterprise value of $82.7 billion, including assumption of existing debt. The deal would add marquee franchises such as Game of Thrones, Harry Potter and the DC Universe to Netflix’s library, potentially strengthening future content pipelines. However, the transaction raises integration risks, incremental leverage and regulatory scrutiny, factors that investors must weigh against the potential for accelerated subscriber growth and differentiated content offerings. With the stock trading at roughly 26 times forward earnings estimates, the market is pricing in both deal execution uncertainty and forecasts for steady margin improvement.