3 Reasons to Buy Netflix Stock After Strong Q4 Earnings

Netflix’s performance in the fourth quarter of 2025 was a real showstopper. Revenue soared to $12.05 billion, up 18% from the previous year, beating expectations. Earnings per share also impressed, reaching 56 cents, a 31% improvement from the year before. The company hit a major milestone by surpassing 325 million paid memberships worldwide, getting closer to a global audience of nearly one billion people. The good news doesn’t stop there—operating income saw a 30% spike to $2.96 billion, with operating margins improving by 2 percentage points to 24.5%. Even with heavy investments in content and tech, Netflix still managed to increase non-GAAP free cash flow to $1.87 billion in the quarter.

Looking ahead to 2026, things are looking bright. The company expects to rake in revenues between $50.7 billion and $51.7 billion for the full year, a growth of 12% to 14%, thanks to expanding memberships, smart pricing strategies, and increasing ad revenues. First-quarter revenues are projected to be around $12.16 billion, marking a 15.3% jump from the previous year. And the operating margin goal for 2026 is set at 31.5%, a hefty 2-point increase from 2025.

In a move to broaden its content library and reach new audiences, Netflix has partnered up with Spotify, The Ringer, iHeartMedia, and Barstool Sports to bring over 30 video podcasts to the platform starting this January. From sports and culture to true crime, these podcasts aim to engage younger viewers and boost ad revenue. Live content has also been a hit, with events like the Jake Paul versus Anthony Joshua fight and NFL Christmas Day games pulling in big numbers. Netflix’s share of US TV time hit a record high in December 2025, showing just how popular their shows are.

In perhaps one of its biggest moves yet, Netflix announced plans to acquire Warner Bros. for a whopping $82.7 billion. This deal would bring in major franchises like Harry Potter and DC Comics, beef up production capabilities, and enhance theatrical distribution. The deal is set to close in the third quarter of 2026, pending regulatory approvals, but Netflix is confident it will go through.

Despite all these wins, Netflix’s stock has seen a 26.8% drop in the past six months, lagging behind competitors like Apple, Amazon, and Disney. But with a forward price-to-earnings ratio of 26.88 times, investors seem optimistic about its future. The stock may be pricier than others in the industry, but with its track record of growth and innovation, it might just be a worthwhile investment for the long haul.