Hollywood has been in a frenzy about the potential demise of the theatrical business if Netflix acquires Warner Bros. Discovery, but during the streamer’s Q4 2025 earnings call last week, Netflix co-CEO Ted Sarandos sought to put some of those fears to rest. “When this deal closes, we will be in the theatrical business,” he said. “I’ve said it many times: This is a business and not a religion.” While the Netflix–WBD deal is perhaps the hottest topic in Tinseltown, there were many other notable stats to come out of Netflix’s earnings. The company reported an 18% YoY increase in quarterly revenue and a 16% YoY increase in revenue for the year. Revenue in the US and Canada region in particular increased 18% YoY in the quarter. Membership and engagement grew too, with Netflix crossing 325 million paid memberships. View hours on the platform were up slightly, 2% YoY, in the second half of 2025, although Netflix co-CEO Greg Peters acknowledged that view hours are a “broad metric.” The subscriber growth didn’t seem to be enough to sway investors, and Netflix stock fell after the earnings call as the company noted it would pause share buybacks to support its newly amended offer to acquire Warner Bros. entirely in cash announced last Tuesday. Ads bonanza: Netflix continues its steady buildout of its ads business. It began testing modular interactive video ads late last year, and the format will be available globally in Q2, Peters said during the call. It’s also iterating on its ad tech stack, Netflix Ad Suite, and has grown its fill rates, Peters added. Netflix is also making more of its first-party data available to advertisers to assess their media buys this year. Now that it’s scaled its ad business to 12 countries, increasing inventory monetization will be a key focus for the next several years. “There is still a gap between the ad tier [average revenue per membership] for Standard Without Ads, but that gap is narrowing,” Peters said. “As we improve our ads capabilities, we can close that gap over time.” Continue reading here.—JS |