Netflix enters its next earnings report with investors focused on two pillars: content investment and the expansion of its advertising business. The quarterly results, due Thursday, will be watched closely as the company reports its first full set of results after a failed bid for Warner Bros Discovery.
Had the deal gone through, Netflix would have taken ownership of high-value franchises such as "Game of Thrones" and "Friends," avoiding the long, expensive process of building comparable intellectual property internally. Instead, Netflix now faces the prospect of stiffer rivalry if the proposed $110 billion transaction combining Warner Bros and Paramount Skydance is completed.
Analysts polled by LSEG expect Netflix to announce first-quarter revenue of $12.18 billion, a 15.5% increase year-over-year, with advertising contributing $634 million to that total. The company implemented a U.S. price increase in March, a move some analysts say could prompt Netflix to raise its full-year revenue forecast. Observers also note the price rise could steer a portion of subscribers toward Netflix's lower-priced, ad-supported tier, although advertising revenue still represents a relatively small share of overall receipts.
Market reaction to Netflix's strategic choices has been positive this year: the stock has risen about 13% year-to-date and is up roughly 26% since Netflix walked away from an earlier $72 billion offer for Warner Bros. Investors are now looking for evidence the company will intensify efforts around live and sports-related programming as a route to scale advertising revenues.
Live programming grew during the quarter. A concert by K-pop group BTS, streamed from Seoul, attracted 18.4 million viewers worldwide. Netflix also streamed the 2026 World Baseball Classic, which became the most-streamed baseball game globally for the period cited. These examples underline the company’s recent push into events that can generate sizable, advertiser-friendly audiences.
"We’re kind of entering another phase for the ad business, where they are becoming one of the largest scaled global advertising platforms," said John Belton, a portfolio manager at Gabelli Funds, which holds Netflix shares. The comment captures investor expectations that Netflix will leverage its global reach to grow ad sales.
How effectively Netflix translates higher prices, more live programming and a growing ad product into sustainable revenue growth will be central to the earnings narrative on Thursday. The report will also show whether management plans to accelerate content spending to compensate for the strategic opportunity they did not secure through acquisition.