Netflix heads into Thursday’s Q1 earnings report with a lot riding on it. Analysts surveyed by FactSet expect adjusted EPS of $0.76, up from $0.66 a year ago, on revenue of $12.17 billion — compared to $10.54 billion in Q1 2025.
It’s the first earnings report since Netflix backed out of the race to acquire Warner Bros. Discovery. The company had announced in December it was in talks to buy the studio behind Harry Potter and Game of Thrones, but walked away in February after Paramount Skydance topped its offer.
Netflix shareholders weren’t thrilled about the potential deal and the debt it would have carried. When the deal fell through, the stock bounced back.
“We see a cleaner Netflix story post-WBD merger break, as investors refocus around core and near-term fundamentals,” BMO Research analyst Brian Pitz wrote.
As part of the breakup, Netflix pocketed a $2.8 billion fee from Warner Bros. Wedbush analyst Alicia Reese says that money gives Netflix more firepower. “We expect it to extend its competitive lead,” she wrote.
Warner Bros. shareholders vote next week on Paramount Skydance’s $110 billion offer.
This is also the first report since Netflix raised prices again in March. It bumped the ad-supported Standard plan by $1 to $8.99 per month, the Standard ad-free tier by $2 to $19.99, and the Premium plan by $2 to $26.99.
It’s the second price increase in just over a year. Bank of America analyst Jessica Reif Ehrlich called it a sign of strength. “We view these increases as a validator of Netflix’s confidence in their underlying strength and durability,” she wrote.
BMO’s Pitz estimates the hikes will add roughly $1.5 billion in incremental revenue in 2026, delivering 3.3% growth from pricing alone.
The company no longer reports subscriber numbers each quarter, but Wall Street still tracks viewership through its biannual engagement report. Analysts expect paid subscribers to surpass 331 million globally in Q1.
With the WBD distraction gone, investors are zeroing in on content strategy, ad-tier growth, and where guidance lands for the rest of the year.
Eric Clark of Accuvest Global Advisors put it plainly: “Now that the WBD deal is behind them, investors can get back to what matters most: content strategy, pricing levers and guidance, ad-tier growth, any new ways to drive viewership totals.”
Netflix’s ad-supported tier is seen as a cushion against any consumer belt-tightening. If subscribers feel economic pressure, a cheaper ad-tier option gives them a reason to stay rather than cancel.
Pitz also sees the long game here: investors want evidence that Netflix can “scale a massive $10B+ advertising business over the long term.”
Clark noted that with geopolitical uncertainty in the air, management may hold back on big guidance. “I think we should expect them to re-focus everyone’s attention on their content spending goals,” he wrote.
Netflix stock has climbed 14% so far this year ahead of Thursday’s print.
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