Netflix, Inc. (NFC.DE) shares were trading at 70.28, down 5.43 points, or 7.17%, as of 10:01 a.m. GMT+1, with markets open. The sell-off came even though Netflix exceeded expectations on both revenue and earnings, highlighting investor unease around valuation and deal-related risks.
For the full year, Netflix generated $45.2 billion in revenue, representing 16% year-over-year growth, or 17% on a foreign-exchange-neutral basis, while operating margin expanded by three percentage points to 29.5%. Advertising revenue surged more than 2.5 times to exceed $1.5 billion.
In the fourth quarter, revenue rose 18% from a year earlier, and Netflix surpassed the milestone of 325 million paid memberships. This growth in digital subscriptions highlights a broader trend in the U.S. entertainment market, where users are increasingly pivoting toward high-engagement platforms, including the online casinos which have seen record-breaking traffic in early 2026.
For 2026, based on foreign-exchange rates as of January 1, 2026, Netflix forecasts revenue in the range of $50.7 billion to $51.7 billion. This implies year-over-year growth of 12% to 14%, or 11% to 13% on a foreign-exchange-neutral basis, driven by higher memberships, pricing gains, and a projected near doubling of advertising revenue compared with 2025.
While the outlook points to confidence in the scalability of its business model, some investors questioned whether growth assumptions remain achievable amid intensifying competition and rising content costs.
Netflix and Warner Bros Acquisition
Netflix, Inc. and Warner Bros. Discovery, Inc. (“WBD”) announced that they have amended their definitive agreement for Netflix’s pending acquisition of Warner Bros. Discovery, converting the deal into an all-cash transaction yesterday, January 20, 2026. The all-cash deal remains valued at $27.75 per Warner Bros. Discovery share.
Commenting on the deal, Ted Sarandos, co-CEO of Netflix stated, “The WBD Board continues to support and unanimously recommend our transaction, and we are confident that it will deliver the best outcome for stockholders, consumers, creators and the broader entertainment community,” While a deal could dramatically expand Netflix’s content portfolio, the size of the transaction has triggered concerns over balance-sheet strain, integration challenges, and regulatory scrutiny, issues that appeared to resonate more strongly with European investors.
Macro Uncertainty Adds to Market Volatility While Wall Street Awaits Clarity on Strategic Direction
Broader macroeconomic uncertainty also formed part of the backdrop. The tariff threats against European countries over Greenland have contributed to a risk-off tone in global markets, particularly in Europe.
In the United States, analysts struck a more balanced tone, acknowledging Netflix’s strong operational execution while emphasizing that investor sentiment will likely hinge on the Warner Bros. Discovery acquisition. For now, the sharp European sell-off reflects how quickly strategic ambition can overshadow solid quarterly performance in volatile global markets.
In the U.S. market, Netflix, Inc. (NFLX) closed at $87.26, down $0.74, or 0.84%, and fell further to $82.39, a decline of $4.66, or 5.36%, in pre-market trading as of 4:33 a.m. EST.
