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Netflix pulled in more than $1.5 billion from advertising in 2025, more than doubling the business in just its third year selling ads.
The streaming giant broke out ad revenue for the first time in its shareholder letter on Tuesday, January 21, 2026. Ad revenue grew 2.5 times compared to 2024.
Netflix expects ad revenue to double again in 2026. The company forecasts revenue of $50.7 billion to $51.7 billion for the year, up 12%-14% year-over-year.
The company began testing AI tools in 2025 to help advertisers create custom ads based on Netflix intellectual property. It introduced automated workflows for ad concepts and used AI models to streamline campaign planning.
Ad revenue helped drive Netflix's Q4 2025 performance. Revenue grew 18% year-over-year to $12.1 billion, with advertising cited as one of the primary drivers alongside membership growth and higher pricing.
For the full year, Netflix delivered $45.2 billion in revenue with a 29.5% operating margin, meeting or exceeding all financial objectives.
Ross Benes, senior analyst at eMarketer, told AdNews advertising will become a bigger priority for Netflix.
"The ads business will keep growing a strong rate from a small base. We forecast that Netflix's ad revenues will account for less than one-tenth of all US CTV ad revenues for the next few years," Benes said.
Benes said investors will question whether the Warner Bros. acquisition benefits shareholders.
"So far, markets have not responded kindly to the acquisition,” he said.
“Meanwhile, Netflix sweetened the deal with an all-cash offer and Paramount keeps pushing a mountain of pressure against Netflix.
“But the acquisition of WBD will persist as Netflix seeks to absorb one of its top competitors on its quest to becoming an all encompassing entertainment hub.”
Netflix has more than 325 million paid memberships serving nearly one billion people.
The company's redesigned TV interface integrates advertising alongside video podcasts, live events and games.
The pending acquisition of Warner Bros. includes its film and television studios, HBO Max and HBO.
Netflix and Warner Bros. Discovery amended their merger agreement to an all-cash transaction valued at $27.75 per WBD share, replacing the previous mix of cash and Netflix stock.
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