Netflix announced on Thursday that its board has authorized an additional $25 billion share repurchase program, marking a resumption of capital returns after the streaming giant abandoned a $72 billion deal to acquire Warner Bros Discovery's assets. The news sent Netflix shares up 1.5% in premarket trading.
Buyback Details
The new authorization supplements a buyback approved in December 2024 and carries no expiration date. As of March-end, Netflix had approximately $6.8 billion remaining under its previous buyback plan. The company's shares fell about 9% last year following the initial Warner Bros deal announcement but have since climbed roughly 10% since the deal was scrapped in February.
Strategic Shift
In the two months since walking away from the Warner Bros acquisition, Netflix has rolled out several growth initiatives. These include acquiring Ben Affleck's AI film-tech firm InterPositive, raising subscription prices in the United States, and launching a gaming app for children. Analysts expect the company to refocus on key growth areas such as advertising, live programming, and sports as it scales its ad-supported tier, which is considered crucial for future revenue growth.
Last week, Netflix provided a cautious forecast for the second quarter and announced that co-founder and Chairman Reed Hastings will exit the company in June. The company had previously stated its intention to resume share repurchases while investing approximately $20 billion this year in films and television.
Analyst Commentary
"Netflix's buyback provides some answers on what it plans to do following its WBD breakup fee collection," said Emarketer senior analyst Ross Benes. "But it still doesn't entirely show where the company will reinvest runs." Netflix received a $2.8 billion termination fee from Paramount Skydance, which agreed to pay it as part of its proposed $110 billion acquisition of Warner Bros Discovery.
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