Netflix on Thursday reported Q1 2026 growth of 16% year over year and still projects full-year revenue of more than $50 billion driven by membership growth, pricing and an expected doubling of ads revenue to $3 billion.

The company ended 2025 with more than 325 million paid members and is approaching an audience of 1 billion people. Still, Netflix executives stressed that there is still room to grow, as it estimates that it accounts for only 5% of TV view share globally, reaches under 45% of the addressable market and captures only 7% of addressable revenue. 

“You can pretty much use any measure and say we’ve got tons of room for growth still ahead of us,” Netflix Co-CEO Greg Peters said on an earnings call.

The strong earnings report is the first since the streaming giant walked away from a planned acquisition of Warner Bros. Paramount Skydance on Feb. 27 announced it had entered into a definitive merger agreement with Warner Bros. Discovery, with Netflix receiving a $2.8 billion cash receipt from the deal’s termination fee. Along with its earnings, Netflix announced that co-founder and chairman Reed Hastings will exit the board when his term expires in June to focus on philanthropy and other pursuits — not because of fallout from the Warner Bros. episode.

“Sorry for anyone who was looking for some palace intrigue here, not so,” Netflix Co-CEO Ted Sarandos said of Hastings’ exit on a call discussing the earnings.

Moving forward, Netflix’s top three priorities will be delivering more entertainment value to members, leveraging technology to boost the service and improving monetization, largely through continuing to build out its ad business. These developments are likely to come into greater focus during the streamer’s upfront presentation to advertisers on May 13.

“Ads is growing but not as to the rate marketers expected more than four years ago when the ad tier was launched. As the company enters a new era without Reed Hastings, advertising will play a bigger role. There's no better time to amplify an ads business than right now with the upfronts looming,” Emarketer senior analyst Ross Benes said over email.

Building an ad biz

Netflix executives are pleased with the growth of its ad business, which launched in November 2022. The ads plan represented 60% of all Q1 sign ups within countries where it is available. Netflix plans to launch new products in 2026 that will help advertisers measure the incrementality of their ad buys. 

The growing capabilities of its ad business — including the move to its own adtech stack, deals with demand-side platforms and improved ad products, among other things — has helped it increase its advertiser base 70% year over year to more than 4,000 advertisers. It is seeing significant growth in programmatic advertising, which is on its way to representing more than half of its nonlive ads business.

“Today, we’re still currently concentrating in those top advertising accounts, the largest buyers, which are serviced primarily by the Netflix sales teams. That could be directly through our stack or basically a sales team driving buying behavior through DSPs, either of those,” Peters said.

“Over time, we expect continued growth in that number of advertisers. We’re clearly pushing in that direction. We think we’re going to see percentage of advertisers who buy programmatically increase, and therefore the programmatic share of ad revenue will go up as well,” the executive added.

Netflix partnered with Amazon last September, allowing programmatic inventory to be purchased through the tech giant’s DSP. Beginning in Q2, U.S. advertisers will be able to tap into Amazon Audiences data based on the company’s troves of first-party shopping, streaming and browsing signals. Netflix also made a deal with Yahoo DSP around interest, behavioral, purchase and life-stage data.

DSP deals and tech stack developments are key for Netflix as it builds out the infrastructure required for programmatic or large-scale advertisers and attempts to differentiate itself from other platforms. Brands advertise on an average of 4.9 over-the-top services, per Gartner data shared with Marketing Dive.

“The platforms are trying to showcase that they reach a large audience and can be used as single capabilities to reach a large amount of people, like linear TV has always been able to do,” said Greg Carlucci, senior director analyst at Gartner. “The advertisers themselves are also looking for traceability. The next question for a lot of advertisers is, ‘If I'm willing to commit X amount of dollars, how can I trace back with respect to sharing anonymized data to track performance?’ That's going to be the difference between platforms.”

Nielsen, NFL and more

Netflix also commented on several developments in the media and marketing world that could affect its ads business. Executives downplayed the effect of changes to Nielsen’s methodology for its Gauge report, which measures viewing across linear and digital screens, that would provide a boost to broadcast and cable viewership at the expense of streaming viewership.

“The Nielsen Gauge is not the currency for the video marketplace, and given that there’s no change in consumer behavior or amount of viewing related to this shift, none of this changes our effectiveness or our aspirations in the ad space,” Peters said.

Netflix has reportedly been looking to expand its two-game package with the NFL to four games, per The Wall Street Journal. NFL football drives streaming subscriptions for nearly three in four live sports fans, per Nexxen research shared with Marketing Dive. However, the streamer is more interested in “breakthrough events” — like its current Christmas Day games — rather than larger regular season packages, Sarandos said on the call.

“The NFL is a great property, and it delivers value as part of our total offering, and we are in discussions right now because we think there’s an opportunity to expand the relationship overall, within the same strategy, focused on creating big events for them,” Sarandos said.

As expected, the role of artificial intelligence across Netflix’s business was discussed on the call, with executives noting an opportunity to leverage AI within its Netflix Ads Suite to help develop new creative formats, run custom ads and improve contextual relevance. All together, these developments demonstrate how Netflix is bringing together premium entertainment, pricing and advertising in a meaningful way, said Julie Clark, vice president of media and entertainment at TransUnion.

“Netflix is moving attention into opportunity for marketers, using ads and new formats to potentially deepen engagement and not distract in the viewing experience,” Clark said over email. “The shift needs to move to outcomes, insights, and making environments for brands to show up alongside premium content.”