As Warner Bros. Discovery, Inc. (NASDAQ:WBD) explores options for its sale, Netflix Inc. (NASDAQ:NFLX) executives said they see no need to chase consolidation, stressing that the company's strength lies in building, not buying.
Netflix Reaffirms Focus On Organic Growth
During the company's third-quarter earnings call on Tuesday, Co-CEO Ted Sarandos dismissed speculation that Netflix might pursue major acquisitions in response to renewed merger chatter surrounding Warner Bros. Discovery.
"It's true that historically, we have been more builders than buyers," Sarandos said, adding that Netflix has "plenty of runway for growth" without changing its approach.
While open to selective M&A, he noted the company evaluates every opportunity based on strategic fit, IP value and long-term potential.
Sarandos reiterated that Netflix has "no interest in owning legacy media networks" and remains committed to "investing aggressively and responsibly" while returning excess cash to shareholders through buybacks.
Mergers Don't Guarantee Success, Peters Says
Co-CEO Greg Peters added that previous industry consolidations — including Walt Disney Co's (NYSE:DIS) purchase of 21st Century Fox and Amazon.com, Inc.'s (NASDAQ:AMZN) acquisition of MGM — failed to meaningfully alter the streaming landscape.
Peters said that success in streaming depends on mastering a wide range of skills — from producing multilingual content to leveraging AI and enhancing global user experiences — not on simply merging with another company.
"You have to do that by the hard work of developing those capabilities in the trenches day to day. You don’t get there simply by buying another company that is also still developing those same capabilities," he stated.
Netflix Q3 Revenue Rises 17% Year-Over-Year
Netflix reported third-quarter revenue of $11.51 billion, marking a 17.2% increase from the same period last year. The figure came in just shy of Wall Street's consensus estimate of $11.514 billion.
The company said it achieved its strongest quarterly viewing share in the U.S. and U.K. since late 2022.
For the fourth quarter, Netflix expects revenue to reach $11.96 billion, reflecting a 16.7% year-over-year rise. Analysts, meanwhile, project $11.902 billion.
Price Action: Netflix shares rose 0.23% during Tuesday's session but fell 6.48% in after-hours trading, according to Benzinga Pro.
Benzinga's Edge Stock Rankings indicate that NFLX maintains solid price trend across short, medium and long-term periods. More detailed performance insights are available here.
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