Netflix, Inc.

NFLX · NASDAQ · USD

Analysis

Last 4 earnings calls · through Q3 FY2026

Netflix's growth now comes from charging more and selling ads, not from people watching more. That works only while prices stick and ads scale fast, and this quarter the ad business fell behind its own target for the first time. How much of 2026 revenue growth comes from price rises?

  • Growth now comes from price and ads, not from more viewing.

    View hours grew 2% in the first half of this year, and Peters calls US viewing solid but says we can do better. The low-teens revenue growth guided for 2026 rests on price rises and ads roughly doubling, not on more people watching more.

  • The advertising business missed its own target for the first time.

    Netflix meant to double ads to about $3 billion this year; Peters now says it is a bit behind target, citing slow partner integrations. Price rises must carry more of the growth. How far short of the ad goal will 2026 land?

  • The US content slate is the soft spot, and its boss has been replaced.

    Sarandos says the US is not growing as fast as it could, landing solid doubles and triples rather than home runs, while other regions count on US shows travelling. Peter Rice now runs content and must fix that as spending rises 10%.

Bullish
  • Pricing power per hour viewed
    The bull case is that members pay less per hour watched than on rival services, so Netflix can keep raising prices as it adds value to the service.
  • Advertising grows into second stream
    Advertising is a second revenue stream from members who already pay, and management keeps widening the advertiser base and the tools behind it.
  • Room left in unpenetrated markets
    Most television households outside the mature markets still do not subscribe, so member growth abroad can carry revenue while the United States slows.
Bearish
  • Viewing hours nearly flat
    The bear case is that total viewing hours are barely growing, so revenue depends on charging more for the same amount of watching rather than on a larger audience.
  • American slate produces fewer hits
    American originals are landing fewer hits, and management changed its content chief because those titles are what travel to every other region.
  • Ad roadmap falls behind schedule
    The advertising build-out has slipped behind its own plan, which delays the point where ad revenue per member matches what the standard plan earns.
See the full bull & bear case
PoliticiansInstitutionsInsiders
PoliticianTransactionAmountTradedFiled
Donald Trump
Republican · Executive
Purchase≥$1KAug 24Oct 8
Donald Trump
Republican · Executive
Purchase≥$1.0MAug 21Oct 8
Donald Trump
Republican · Executive
Purchase≥$50KAug 17Oct 8
Donald Trump
Republican · Executive
Purchase≥$1KAug 10Oct 8
Donald Trump
Republican · Executive
Purchase≥$100KJul 27Sep 22

Congressional trading data provided by QuiverQuant

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Product segmentsGeography
FY2025 · USD

How Netflix turned $45.2B of revenue into $13.3B of operating income.

Revenue
Streaming revenues$45.2B▲ 15.85% YoY
Total revenue$45.2B
Gross profit$21.9B48.5%
Operating income$13.3B29.5%
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