Netflix crosses 325 million paid subscribers as it closes in on Warner Bros.

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 on Tuesday, 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% year-over-year 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 on 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.”

The streamer is also focused on integrating AI into its ad offerings. Netflix has already introduced AI models to support campaign planning and subtitle localization, according to its Q4 letter to shareholders, and the tech is also being used to support merchandising.

There’s plenty of room for growth, the company anticipates. With only about 7% of its addressable market in consumer and ad spend reached, Netflix is expecting its ads business to roughly double in 2026.

Content is king: If the Netflix–WBD deal closes as planned, Netflix will get its hands on more content—which translates to more inventory to place ads on. According to the company’s letter to investors, Netflix plans to grow investment in original content if the deal closes, and it also plans to provide more flexible subscription offers with the addition of HBO Max.

The deal, Sarandos said during the call, could be a “strategic accelerant” in an increasingly cutthroat business.

“The TV landscape, in fact, has never been more competitive than it is today,” Sarandos said. “TV is not what we grew up on. TV is now just about everything. The Oscars and the NFL are on YouTube. Networks are simulcasting the Super Bowl on linear TV and streaming. Amazon owns MGM. Apple’s competing for Emmys and Oscars…We all compete with them in every dimension for talent, for ad dollars, for subscription dollars, and for all forms of content.”

That means that, in addition to hits like Stranger Things , Emily in Paris, and Bridgerton, plus a growing sports lineup, Netflix is looking for additional ways to engage with consumers. To support content engagement, Netflix is building out interactive experiences including live voting and a revamped mobile app experience, and last year, the streamer debuted several podcast partnerships, including with Spotify and iHeartMedia. This month, it rolled out original podcasts with Pete Davidson and former NFL player Michael Irvin, and this week, it acquired the popular podcast Therapuss with Jake Shane.

“We think about video podcasts like a modern talk show, but instead of having a single brand-defining show, you have hundreds of them,” Sarandos said. “It’s a broad offering versus a single broad show or format, but it does generate a lot of very passionate engagement and lots of variety.”