Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “Netflix shares are down about five per cent in after hours trading, which might look harsh at first glance, given the quarter itself was solid.
“Revenues, margins and profits all beat expectations, but markets don’t dwell on the rear view mirror for long.
“The issue was guidance, and specifically margins, which are set to come under pressure in 2026 as costs ramp.
“Content spend is doing the damage, a timely reminder that even streaming’s gold standard can’t afford to take its foot off the creative gas.
“Looking further out, price increases lined up for 2026 look like the right call as subscriber growth cools.
“The 325 million subscriber milestone is an eye catcher, but it was broadly expected and didn’t move the dial.
“While 2025 told a story of strong execution, 2026 is shaping up as a year of higher costs and tougher optics.
“Add in the lingering uncertainty around the Warner Bros. deal, not to mention the mammoth price tag, and shares may struggle to regain momentum in the near term.”
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