The news: Netflix’s strong Q1 2026 results helped reinforce the company’s ad business growth following its exit from its Warner Bros. Discovery bid. The company said it anticipates ad revenues to reach $3 billion this year, more than double YoY.

By the numbers:

• Overall revenues: $12.25 billion, +16% YoY
• Operating income: +18% YoY
• Diluted EPS: $1.23 per share, partially due to a WBD termination fee

Why it matters: This marks the first quarter since Netflix abandoned its plan to acquire WBD—an acquisition that would have made the platform the undisputed leader in the paid streaming market. Netflix noted that WBD would have been a “nice accelerant for our strategy, but only at the right price.”

Investors are now looking for signs that Netflix is still expanding its ad offerings and broadening its content mix as a combined WBD and Paramount is expected to emerge as a major streaming competitor. Strong first quarter results suggest Netflix is maintaining momentum even without a transformational acquisition.

Netflix’s ad and content strategy: Emphasis on its ad-supported tier and a push into different content formats could bolster Netflix’s ad revenues, which will increase a significant 88.5% this year in the US alone to $2.42 billion, per our forecast.