Netflix Subscriber Slowdown Sparks Acquisition Focus

Netflix concluded 2025 with solid financial results, though subscriber growth notably decelerated, highlighting the strategic importance of its proposed $72 billion acquisition of Warner Bros. studio. The company reported over 325 million global subscribers by year-end, marking an increase of approximately 23 million subscribers for 2025. This figure represents a substantial slowdown from the 41 million added in 2024, raising concerns among investors about potential market saturation.

Further compounding these concerns, management projected January-March profits below analyst expectations and announced a halt in stock buybacks to facilitate the Warner Bros. deal. While ad sales are expected to double, revenue growth is anticipated to moderate. Netflix's shares experienced a nearly 5% decline in extended trading following the announcements, even as the company posted $2.4 billion in profit and over $12 billion in revenue for the most recent quarter.

The acquisition bid itself has seen developments, with Netflix converting its initial offer to an all-cash proposal to streamline the process. Co-CEO Ted Sarandos expressed confidence, drawing parallels to past competitive battles. However, Netflix also faces regulatory scrutiny, needing to convince U.S. authorities that combining with HBO Max won't harm market competition. The transaction, expected to conclude in six to nine months after Warner Bros. spins off its cable TV business, continues to cast a shadow over the company's stock.