Netflix more than doubled its ad revenue in 2025. It has ambitious plans for 2026.

Netflix’s pending acquisition of Warner Bros. is dominating headlines, but advertising executives are also paying attention to its growing ads business.

The streaming giant reported Q4 2025 earnings on Tuesday, saying that it increased ad revenue by 2.5 times last year compared to 2024, to over $1.5 billion.

“Netflix is succeeding in ads for the same reason they succeeded in streaming: it has tremendous scale, an excellent brand and great content,” said Jason Fairchild, co-founder and CEO of tvScientific. “But what’s holding Netflix back is the infrastructure required to deliver performance to the massive cohort of advertisers that care mostly about performance.”

It’s quite the stat for a company that, until a few short years ago, had pushed back on the idea of advertising. But in the post-pandemic era, and with increasing competition for engagement from tech companies, most of the major premium streamers — including Netflix — have introduced ad plans as new revenue streams.

Advertisers have been eager to give Netflix’s ad inventory a go given its massive reach; the company claims 190 million monthly active viewers on its ad-supported tier and it said on Tuesday that it has surpassed 325 million global subscribers. It also has a reputation as a provider of premium video content amid a sea of video inventory of questionable quality and provenance (*cough*YouTube*cough*).

While Netflix’s stock has dipped in light of the looming Warner Bros. acquisition — including on Tuesday, despite beating expectations — financial analysts remain bullish on Netflix as an advertising platform. Some analysts even predict advertising will overtake subscriptions to become the streaming service’s leading source of revenue.

“Netflix is positioning for substantial growth in global advertising, and that should not be overlooked,” Wedbush Securities analyst Alicia Reese told The Hollywood Reporter ahead of Netflix’s Tuesday earnings call. “We expect ad revenue to become Netflix’s primary revenue driver in 2026, with significant opportunities in 2027. 

The next phase of Netflix’s ads growth will depend on it providing “full-funnel measurement, optimizing to business outcomes and moving past legacy TV ad models,” said Rachel Farchild, executive vice president of sales at Strategus.

On Tuesday, co-CEO Greg Peters said during the call with investors that Netflix plans to offer a wider array of ad formats this year, including enhanced interactive video ads that will roll out globally in the second quarter.

In its letter to shareholders, the company also said that it tested new AI tools in 2025 “to help advertisers create custom ads based on Netflix’s intellectual property,” and that it plans to build on that progress this year.

Netflix is also focused on diversifying its content offerings, including with recently launched video podcasts, to compete with the likes of YouTube and other platforms. And if the WB deal goes through, Netflix will further bolster its content library, which could attract even more advertiser interest.

As co-CEO Ted Sarandos said on Tuesday’s call, the TV industry “has never been more competitive.” That means competition for ad dollars, too.