21 January 2026
If you are covering the latest financial results from Netflix, please find below a comment from Ben Barringer, head of technology research at Quilter Cheviot:
“Netflix’s results for the fourth quarter last year were fine, but nothing exciting as we await clarity on the Warner Brothers Discovery deal. Sales growth came in at 18% for the quarter, and 16% for the full year, with margins improving significantly thanks to membership growth, advertising and higher pricing. However, investors were left a little disappointed by the guidance for this year pointing to growth of 12-14%. Margins aren’t expected to grow much more next year as operational costs go up.
“Netflix also published its engagement report which showed 1-2% engagement growth, a little below expectations which implies the WBD acquisition could be more defensive to raise engagement and acquire high quality content. Netflix sees itself as competing against all forms of entertainment including YouTube, social media and gaming, but it needs to be careful not to lose focus on what made it great in the first place.
“For now, the wider market is moving cyclical and thus Netflix’s share price is being hit, as it is defensive growth. It remains a great asset with strong long-term prospects, but there needs to be a resolution to the WBD acquisition for the stock to work again. If it can get that over the line, then further price increases and engagement are possible and gives the company the chance to be the dominant entertainment business for years to come.”
