Netflix more than doubled its revenue derived from advertising in 2025 and says it is on track to achieve a similar rate of growth for the segment this year, according to an earnings statement. The streaming giant generated over $1.5 billion in ad revenue in 2025, its third year selling ads and a period where the business shifted focus to a suite of in-house ad tech after previously relying on Microsoft.
Looking ahead, Netflix will continue developing its technology, sales and go-to-market capabilities for advertisers as it targets $3 billion in ad revenue for 2026. Closing the gap on the average revenue generated per membership for the ad-supported tier versus standard subscriptions is in focus, with executives positioning ad-tech improvements and greater access to first-party data as a way to speed up execution and refine areas like measurement.
“That ability to tap into this deep library of insights that we have ultimately enhances the performance of media buys,” said Netflix Co-CEO Greg Peters on a call discussing the Q4 and full-year results with investors. “We're also offering advertisers a wider array of ads formats, so more ads products, enhanced interactivity, which should improve outcomes.”
Elsewhere, Netflix is still building out its partnership model in the chase for scale. In September, it linked with Amazon — otherwise a leading rival in streaming content — to allow Netflix ad inventory to be purchased through Amazon’s demand-side platform.
Executives were questioned on the call about Netflix’s planned acquisition of Warner Bros., which was first announced late last year but has grown complicated as the streamer tries to fend off a rival bid from Paramount Skydance. Netflix and Warner Bros. amended their agreement on Tuesday to be an all-cash transaction that still values the storied film and TV studio in charge of properties like HBO and the DC Comics universe at $27.75 per share.
Netflix brass sounded confident the $83 billion deal, which is favored by Warner Bros., would pass regulatory scrutiny and emphasized how Warner Bros. will help the business stay competitive in a media landscape where Netflix is not only fending off streaming competitors, but also social media. YouTube was cited as a substantial threat, as the Google-owned service recently secured the rights to broadcast the Oscars while its connected TV service carries the coveted NFL Sunday Ticket package.
“YouTube is not just [user-generated content] and cat videos anymore,” said Co-CEO Ted Sarandos on the investor call. “They are TV. So we all compete with them in every dimension: For talent, for ad dollars, for subscription dollars, for all forms of content.”
On the creative front, Netflix is continuing to explore how artificial intelligence can help brands tailor their ads to different intellectual properties, an approach it started testing last year. AI is also being used for ad concepting and campaign planning.
Netflix’s ad-supported offerings reach about 190 million monthly active viewers, an internal metric. In Q4, the service surpassed 325 million paid memberships, a new milestone, while total revenue for the period increased 18% year over year to $12.1 billion.
