Netflix Surges as Growth Forecast Overshadows Q4 Profit Miss
The streaming giant beat revenue and subscriber estimates and guided for double-digit 2026 growth, pushing shares higher despite a significant miss on quarterly earnings.
Netflix Inc. (NFLX) shares climbed in after-hours trading after the company delivered a blockbuster revenue figure and a bullish forecast for 2026, signaling to investors that its growth engine is accelerating even as it ramps up spending on new content.
Investors shrugged off a significant miss on quarterly profits, instead focusing on a top-line beat and strong future guidance. The streaming pioneer reported Q4 revenue of $12.05 billion, comfortably surpassing analyst estimates of $11.51 billion. The company also announced it had eclipsed 325 million paid memberships globally, a testament to the success of its strategic initiatives.
However, the company posted earnings per share of just $0.56, a figure that fell dramatically short of the consensus Wall Street estimate of $6.97. While the profit figure still represented a 31% year-over-year increase, the wide miss points to a deliberate strategy of heavy reinvestment. Recent reports indicate the company plans to boost spending on programming in 2026, a move aimed at solidifying its content library to drive long-term subscriber retention and acquisition.
The market’s enthusiastic response underscores a clear verdict: investors are prioritizing growth and future profitability over near-term earnings. The company’s stock, which closed the regular session down 0.84% at $87.26, jumped towards the $89 mark in after-hours activity following the release.
The optimistic sentiment is fueled by Netflix's robust forward-looking statements. For the full fiscal year 2026, management guided for revenue growth in the range of 12% to 14%. More impressively, it forecast an operating margin of 31.5%, a significant expansion from the 29.5% margin posted in 2025. This suggests substantial confidence in the company's ability to scale its operations and advertising revenue while managing its content and operating costs effectively.
"The results demonstrate the success of Netflix's multi-pronged strategy," noted one analyst. "The crackdown on password sharing and the maturation of the ad-supported tier are clearly converting viewers into paid subscribers, while a steady drumbeat of international hits is expanding their global footprint."
The company's strong performance and upbeat outlook stand in stark contrast to legacy media companies. On the same day, Warner Bros. Discovery projected declining sales and profit for its cable unit, highlighting the widening gap between streaming leaders and traditional players.
According to the company's quarterly filings, the growth in paid memberships was a key driver for the 4.7% revenue beat. This top-line strength gives the company the flexibility to absorb higher content amortization costs in the short term to build a more durable entertainment offering for the years ahead.
Heading into the report, Wall Street was already broadly positive on Netflix, with 28 analysts rating the stock as a 'Buy' or 'Strong Buy' against just 14 'Hold' or 'Sell' ratings. The average analyst price target sits at $122.96, suggesting significant upside from its current levels.
For investors, the key takeaway from the report is that the Netflix growth story has a new chapter. By successfully navigating the transition from a single-revenue-stream model to a more diversified business including advertising, the company has proven its resilience. The path is now set for Netflix to demonstrate that it can not only grow its massive user base but also convert that scale into impressive and sustained profitability.