New York, Jan 20, 2026, 17:06 EST — After-hours
- Netflix shares dropped roughly 4% in after-hours trading, even though the company beat revenue estimates for the holiday quarter.
- The streamer projects 2026 revenue between $50.7 billion and $51.7 billion, falling short of the lower end of Street estimates.
- Investors are scrutinizing Netflix’s $82.7 billion all-cash offer for Warner Bros Discovery, along with the details of its financing strategy.
Netflix shares dropped roughly 4% in after-hours trading Tuesday, after the company’s 2026 revenue forecast came in at the low end of expectations. This came despite beating Wall Street’s sales estimates for the holiday quarter.
This shift is significant since Netflix is shaping expectations for the upcoming earnings cycle, with investors focusing more on its Warner Bros Discovery bid than on any quarterly report. The options market had been preparing for a major move after the earnings release.
The acquisition battle now doubles as a live test of deal certainty. Netflix’s move to an all-cash bid aimed to sidestep stock-price swings, yet it sparks fresh concerns over leverage and financing costs.
Netflix closed regular trading at $87.26, down 0.84% ahead of its earnings release.
Netflix reported in its SEC shareholder letter that fourth-quarter revenue climbed 17.6% year-over-year to $12.051 billion, with net income hitting $2.419 billion and diluted EPS at $0.56. The company expects first-quarter revenue to reach $12.157 billion and EPS to come in at $0.76. Looking further ahead, Netflix projects 2026 revenue between $50.7 billion and $51.7 billion, with an operating margin of 31.5%.
Netflix’s all-cash bid prices Warner Bros Discovery at $27.75 per share, with a shareholder vote expected by April, according to regulatory filings. Netflix co-CEO Ted Sarandos described the updated offer as delivering “greater financial certainty.” Meanwhile, Alex Fitch, portfolio manager at Harris Oakmark, said the move “only ramps up the pressure” on Paramount to up its game. Reuters
Some investors zeroed in less on the earnings beat, more on the profitability targets. Barron’s highlighted Netflix’s operating margin guidance as a key concern and noted worries over the hefty debt tied to a complicated acquisition.
Netflix’s filings highlight the risks: the deal still needs regulatory and shareholder approval and could be postponed or even fall through. Integration and financing challenges might also weigh on the company’s results.
U.S. stocks fell sharply Tuesday, shaken by new tariff threats linked to a dispute over Greenland. Risk appetite took a hit, sending volatility indexes up.
Traders are now eyeing the deadline on the competing bid: Fox Business reported that Paramount Skydance’s tender offer ends Jan. 21, while Warner Bros has scheduled a special meeting by April to approve the Netflix deal.
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