Netflix Q4 2025 Earnings Review
An analysis of Netflix's progress and future outlook
Yesterday, January 20, 2026, Netflix published its Q4 2025 results after the market close. In pre-market trading, the stock is down significantly by -7%. Is this punishment justified? Or does it offer a golden buying opportunity?
In this article, I provide my interpretation of Netflix’s figures and future potential.
Disclaimer: This article does not constitute investment advice (disclaimer). As of today, January 21, 2026, I hold a long position in Netflix.
Key Points
Revenue: In 2025, Netflix’s revenue grew by 15.9% Y/Y to $45.2 billion.
Operating Profit: Operating profit rose by 27.9% Y/Y to $13.3 billion, increasing the operating profit margin by 278 bps to 29.5%.
Net Income: Net profit increased by 26.1% Y/Y in 2025 to $11.0 billion, with the net profit margin rising by 197 bps to 26.1%.
Earnings Per Share: Netflix’s EPS (diluted) rose by 27.4% Y/Y to $2.53 (post 10-for-1 stock split).
Content Investments: In 2025, Netflix invested $17.1 billion in enriching its content offerings; an increase of 5.4% Y/Y (2024: $16.2 billion).
Free Cash Flow: Throughout 2025, Netflix generated an FCF of $9.5 billion ($8.8 billion adjusted for one-time costs regarding Brazilian tax authorities in Q3 2025).
2026 Outlook: For FY2026E, Netflix expects revenue growth of +12-14% Y/Y ($50.7-$51.7 billion) with an operating margin of 31.5%. This would bring the expected operating profit for FY2026E to ~$16 billion, an implied increase of ~21% Y/Y.
Valuation: With a market capitalization of $345 billion as of January 21, 2026, Netflix is trading at a forward multiple of 21x its operating profit.
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