Netflix targets $3B in ad revenue while Warner Bros. deal looms

Netflix greater than doubled its revenue derived from promoting in 2025 and says it’s heading in the right direction to attain an identical rate of growth for the segment this yr, in accordance with an earnings statement. The streaming giant generated over $1.5 billion in ad revenue in 2025, its third yr selling ads and a period where the business shifted focus to a collection of in-house ad tech after previously counting on Microsoft. 

Looking ahead, Netflix will proceed developing its technology, sales and go-to-market capabilities for advertisers because it targets $3 billion in ad revenue for 2026. Closing the gap on the typical 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 solution to speed up execution and refine areas like measurement. 

“That ability to tap into this deep library of insights that we’ve got 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 continues to be constructing out its partnership model in the chase for scale. In September, it linked with Amazon — otherwise a number one rival in streaming content — to permit Netflix ad inventory to be purchased through Amazon’s demand-side platform. 

Executives were questioned on the decision about Netflix’s planned acquisition of Warner Bros., which was first announced late last yr but has grown complicated because 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 also 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 just isn’t only keeping off streaming competitors, but in addition social media. YouTube was cited as a considerable threat, because 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 just isn’t just [user-generated content] and cat videos anymore,” said Co-CEO Ted Sarandos on the investor call. “They are TV. So all of us compete with them in every dimension: For talent, for ad dollars, for subscription dollars, for all types of content.”

On the creative front, Netflix is continuous to explore how artificial intelligence can assist brands tailor their ads to different mental properties, an approach it began testing last yr. AI can also be getting used for ad concepting and campaign planning.

Netflix’s ad-supported offerings reach about 190 million monthly lively viewers, an internal metric. In Q4, the service surpassed 325 million paid memberships, a brand new milestone, while total revenue for the period increased 18% yr over yr to $12.1 billion.