KUALA LUMPUR, Jan 23 (Bernama) -- Bursa Malaysia’s benchmark index recouped earlier losses to settle higher, maintaining a more than six-year high, buoyed by continued buying interest in technology stocks, while the strengthening of the ringgit against the US dollar further lifted investor sentiment. At 2.27 pm today, the local currency strengthened to 3.9992 versus the greenback, its strongest level in more than seven years. It was last seen at this level on June 18, 2018, at 3.9960/9990. At 5 pm, the FTSE Bursa Malaysia KLCI (FBM KLCI) rose 2.85 points or 0.17 per cent to 1,719.99 from yesterday’s close of 1,717.14. The index surpassed its previous peak of 1,719.00 recorded on Feb 26, 2019. The barometer index opened 1.30 points lower at 1,715.84 and moved between an intraday low of 1,711.89 in early trade and a high of 1,723.41 in late afternoon before slipping slightly toward the close. However, market breadth was negative with decl...
Netflix delivered a strong Q4 earnings beat across revenue, profits and cash flow, reinforcing the resilience of its core streaming and advertising engines. However, the spotlight quickly shifted to its proposed ~$80 billion all-cash acquisition of Warner Bros., raising concerns over margin pressure, financing costs and execution risk. Netflix shares fell over 4% in after-hours trading as investors reassessed the risk-reward balance.
Q4 & FY2025 Financial Snapshot
Netflix’s operating performance remained solid despite near-term margin pressure.
Q4 2025
Revenue: $12.05bn (+18% YoY)
Operating margin: 24.5%
Operating income: $3.0bn
Diluted EPS: $0.56
Full-Year 2025
Revenue: $45.0bn (+16%)
Operating margin: 29.5%
Free cash flow: $9.5bn
2026 Guidance
Revenue: $50.7–$51.7bn
Target operating margin: 31.5%
Free cash flow: ~$11bn
What Drove the Earnings Beat
The outperformance was underpinned by content strength and operating leverage.
Total viewing hours in 2H25 reached 96bn hours
Viewing of original content rose 9% YoY
Flagship releases, including the final season of Stranger Things, supported engagement, retention and pricing power
Revenue upside came from membership growth, price increases and higher ad revenue, despite FX headwinds
Advertising: Scale Reached, Monetisation Next
Advertising is increasingly central to Netflix’s growth story.
Ad revenue grew >2.5x YoY in 2025, surpassing $1.5bn
Ad-supported tier reached ~190m monthly active viewers globally
Ad-supported viewing penetration in US households climbed to ~45%
Management expects ad revenue to roughly double again in 2026
Takeaway: Advertising is still a small share of revenue, but its strategic value to cash flow quality and ARPU growth is rising.
Margins & the $80B Acquisition Overhang
Q4 operating margin slipped to 24.5%, down from 28.2% in Q3, reflecting:
Content amortisation timing and seasonality
~$60m in interest expense tied to bridge financing for the proposed all-cash acquisition of Warner Bros.
While the deal has yet to close, financing costs are already flowing through earnings, increasing investor sensitivity to near-term profitability.
Balance Sheet & Cash Flow Capacity
Despite the scale of the proposed acquisition:
Cash and equivalents: ~$9.0bn (end-2025)
Free cash flow: $9.5bn in 2025, guided ~$11bn in 2026
Netflix has the capacity to absorb higher leverage, refinance bridge loans and manage elevated interest costs over time. Longer term, the Warner Bros. and HBO Max assets could enhance content efficiency, ad pricing power and engagement — but regulatory and execution uncertainty remains a near-term drag.
Investor Read
Fundamentals remain strong, driven by engagement, ads and cash flow
Margin pressure is real, but currently financing-driven rather than operational
The stock appears to be trading with a risk discount tied to acquisition uncertainty, not a breakdown in the business model
At current levels, Netflix may not be a low-risk bargain, but its cash generation provides flexibility, making the shares potentially suitable for long-term, incremental positioning if deal risks moderate.
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