Netflix Q4 earnings: Can the streaming giant maintain its momentum?
Netflix reports Q4 results with investors focused on advertising growth, pricing power and engagement metrics rather than traditional subscriber numbers.
Netflix Q4 earnings: Can the streaming giant maintain its momentum into financial year-end?
Netflix heads into its fourth quarter (Q4) earnings report with investor focus firmly on whether the momentum seen through the third quarter (Q3) can be sustained into year-end, particularly as the company leans more heavily on monetisation, advertising and engagement rather than headline subscriber additions.
Netflix financial expectations
Netflix is expected to see significantly increased revenue, net income and earnings per share (EPS):
Revenue:
$11.97 billion, 16.8% higher than in the same period a year ago
Advertisement revenue:
$1.08 billion
Net income:
$2.39 billion, up 27.7% compared to a year ago
EPS:
55 cents, up 29.4%
Strong Q3 performance sets high bar for Q4
In its Q3 earnings, Netflix delivered another solid set of results, reporting double-digit year-on-year (YoY) revenue growth and a further expansion in operating margin. The performance was driven by a combination of pricing actions taken earlier in the year, continued traction in the ad-supported tier and disciplined content spending.
While Netflix no longer reports quarterly subscriber numbers, management highlighted strong engagement trends, with viewing hours rising and retention holding up well despite higher prices in several key markets. The company also reiterated that advertising revenue remains on track to grow sharply YoY, albeit from a relatively small base.
That Q3 performance sets the backdrop for Q4, which is typically a seasonally strong quarter for the platform due to holiday viewing and a heavier content slate. Investors will be looking closely at whether engagement remained robust through the end of the year and whether higher-priced plans and advertising continued to lift average revenue per user.
Management commentary in Q3 suggested that price increases had been absorbed better than expected, with limited impact on churn, a theme the market will want to see confirmed in the Q4 numbers.
Advertising business takes centre stage
The advertising business will be a central focus of the Q4 release and represents a significant shift in Netflix's business model. In Q3, Netflix pointed to continued growth in ad-tier adoption and improving monetisation as its in-house ad technology rollout progressed.
Q4 should provide further evidence of whether advertisers are committing more spend to the platform during the key festive period and whether ad revenue is scaling in line with management's longer-term ambitions. Progress here is important not just for revenue growth, but for Netflix's broader valuation narrative as a hybrid subscription-and-advertising media company.
The advertising tier launched in late 2022, marking a major strategic pivot for a company that had long resisted ads. Since then, Netflix has steadily built out its advertising infrastructure and sales capabilities to compete with established players.
Margins and cash generation under scrutiny
Margins and cash generation will also be under scrutiny as investors assess the quality of Netflix's earnings growth. Netflix used Q3 to underline its commitment to operating discipline, with margins expanding even as the company continues to invest heavily in content and technology.
For Q4, investors will be watching for confirmation that this margin improvement is sustainable and that free cash flow remains strong, particularly given higher seasonal marketing and content costs. Any update on capital allocation, including share buybacks, would likely be well received.
Netflix's ability to grow margins whilst maintaining content investment demonstrates operational leverage in its business model. The company has moved away from aggressive spending growth, focusing instead on efficiency and return on investment for its content slate.
Free cash flow generation has become increasingly important for Netflix as it matures. Strong cash generation supports share buybacks and provides flexibility for strategic investments without relying on external financing.
Content pipeline remains crucial driver
Content remains another key variable that will influence Q4 results and investor sentiment. Netflix's Q3 commentary emphasised the strength of its pipeline and the importance of global, non-English-language originals in driving engagement.
Q4 results will help indicate whether recent releases translated into sustained viewing and whether the platform continues to benefit from its scale advantage over traditional broadcasters and newer streaming rivals. The company's content strategy has evolved to balance big-budget tentpole releases with targeted programming for specific audiences.
Netflix's global reach allows it to amortise content costs across a massive subscriber base, creating structural advantages versus regional competitors. This scale benefits are particularly evident in producing international content that travels well across markets.
Q4 typically features major film releases and returning series designed to capitalise on holiday viewing patterns. Success in maintaining high engagement during this peak period would support Netflix's competitive positioning.
Key metrics to watch in Q4 results
Several specific metrics will provide insight into Netflix's performance and trajectory:
Revenue growth:
Consensus expects year-on-year revenue growth continuing in double digits.
Operating margin:
Further expansion would confirm sustainable profit improvement.
Free cash flow:
Strong generation supports capital return and investment flexibility.
Average revenue per user:
Growth here indicates successful monetisation improvements.
Advertising commentary:
Qualitative updates on ad tier adoption and monetisation progress.
Analyst ratings and technical analysis of the Netflix share price
According to LSEG Data & Analytics, analysts rate Netflix as a ‘buy’, with 12 'strong buy', 20 ‘buy’, 13 'hold' and 1 'sell' rating and an average mean long-term price target at $127.46, approximately 43% above the current price (as of 13/01/2026).
Netflix LSEG Data & Analytics chart
Netflix also has a TipRanks Smart Score of ‘7 Neutral’ and a ‘buy’ rating.
Netflix TipRanks Smart Score chart
Netflix shares – down around 5% year-to-date but up around 6% over the past year – remain in a clearly defined downtrend and are trading at levels seen in April 2025.
Netflix weekly candlestick chart
Following its over 30% drop from its $134.12 June 2025 record high, the Netflix share price has been slipping for six consecutive weeks and is trading around the $90 mark.
Possible downside targets are the January to April 2025 lows at $85.45 - $82.11. This area would be expected to offer at least interim support, though.
For the bulls to be back in the frame, the November-to-January downtrend line at $93.56 would need to be overcome in the first instance and then at the very least the mid-December high at $97.33 and also the psychological $100 barrier.
Netflix daily candlestick chart
Medium-term the current bearish trend would only be reversed on a rise and daily chart close above the mid-November high at $116.73.
Competitive landscape intensifies pressure
Netflix’s relatively underperforming share price reflects the fact that the streaming company is operating in an increasingly competitive streaming environment that shapes investor expectations. Traditional media companies have launched their own platforms whilst tech giants like Amazon and Apple continue investing heavily in content.
This competitive intensity makes Netflix's pricing power and engagement metrics even more impressive. The company has maintained share despite rivals offering competitive or lower pricing, suggesting strong content differentiation and consumer loyalty.
Q4 results will be assessed partly on how Netflix is performing relative to competitors. Recent industry data has shown varying fortunes across streaming platforms, with some struggling to achieve profitability whilst Netflix demonstrates improving margins.
The company's scale advantages in content production, technology infrastructure and global distribution provide meaningful competitive moats. Q4 results should reinforce whether these advantages are translating into durable financial outperformance.
What this means for investors
Overall, Netflix's Q4 earnings will be judged less on short-term user growth and more on the quality of earnings. After a strong Q3, investors will be looking for confirmation that pricing power, advertising momentum and operating leverage are combining to deliver durable profit growth.
A solid Q4 print would reinforce confidence in Netflix's evolving business model, while any signs of slowing engagement or weaker ad traction could prompt questions about whether much of the good news is already reflected in the share price.
The streaming giant's transformation from a pure subscriber growth story to a monetisation and profitability story represents a maturation of its business model. This evolution has attracted a broader investor base but also raised expectations for consistent execution.
For those considering Netflix as an investment, Q4 results will provide crucial data points about the sustainability of recent improvements. The combination of pricing discipline, advertising growth and margin expansion creates multiple pathways for value creation if successfully executed.
How to trade Netflix shares
Investors interested in gaining exposure to Netflix have several options depending on their objectives and risk appetite. Here's how to approach trading or investing in Netflix:
- Research Netflix's latest financial performance, competitive positioning and management guidance thoroughly. Understanding the streaming industry dynamics and Netflix's strategic initiatives helps inform investment decisions. How to invest in stocks provides useful background for those new to equity investing.
- Choose whether you want to trade or invest in Netflix. Trading allows you to speculate on short-term price movements around earnings releases, whilst investing involves taking a longer-term view on the company's prospects.
- Open an account with a broker that provides access to US-listed shares. Netflix trades on the Nasdaq 100 exchange under the ticker NFLX.
- Search for Netflix shares on your chosen trading platform. Review current pricing, analyst recommendations and key financial metrics before proceeding.
- Place your trade based on your analysis and risk tolerance. Consider using stop-loss orders to manage downside risk, particularly around volatile earnings announcements. Spread betting and CFD trading allow you to speculate on both rising and falling prices.
Remember that individual stock positions carry concentration risk. Diversification across multiple holdings reduces portfolio volatility compared with holding single stocks like Netflix.
Important to know
This information has been prepared by IG, a trading name of IG Markets Limited. In addition to the disclaimer below, the material on this page does not contain a record of our trading prices, or an offer of, or solicitation for, a transaction in any financial instrument. IG accepts no responsibility for any use that may be made of these comments and for any consequences that result. No representation or warranty is given as to the accuracy or completeness of this information. Consequently any person acting on it does so entirely at their own risk. Any research provided does not have regard to the specific investment objectives, financial situation and needs of any specific person who may receive it. It has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such is considered to be a marketing communication. Although we are not specifically constrained from dealing ahead of our recommendations we do not seek to take advantage of them before they are provided to our clients. See full non-independent research disclaimer and quarterly summary.
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