• by Wayne Friedman , 3 hours ago

As part of its first-quarter earnings release, Netflix says advertising continues to see sharp growth -- remaining on track to hit $3 billion at end of 2026.

This would double its total of $1.5 billion at the end of 2025.

Netflix says it now works with 4,000 advertisers -- up 70% over a year ago. 

Although still just 5% of Netflix’s overall revenue, the big streamer’s growth -- 60% of all its subscriber gains in the first quarter -- came from its advertising-supported option, which is now priced at $8.99 in the U.S.

“Advertising is becoming a more meaningful contributor, particularly given its role in lowering churn and driving new subscriber acquisition,” according to Substack publication Madison and Wall.

Overall first-quarter revenue was up 16% to $12.3 billion, with guidance for the reminder of this year to end 2026 with between $50.7 billion and $51.7 billion in annual revenue.

First-quarter operating income was up 18% to $3.96 billion.

Alongside all of this, Netflix continues to build its content spending efforts, which totaled $16.5 billion in 2025. This all helped to drive double-digit revenue growth and maintain its strong dominant lead over other premium streamers.

“We believe there is a tight correlation between content spending and share of advertising, and many of Netflix’s direct competitors are either holding content budgets flat or trimming them," Madison and Wall said.

Netflix now claims to have a reach scale of 1 billion people globally, but the company also says, in its shareholder letter,  “we’re also still incredibly small.”

“We account for an estimated [roughly] 5% of TV view share globally, and as of the end of 2025 we penetrated less than 45% of our Total Addressable Market (TAM) of broadband households.”

Last month Netflix announced price hikes for its “Standard with Ads” option, now $8.99 (formerly $7.99); “Standard” (ad-free), $19.99 (formerly $17.99), and “Premium” (4K), $26.99 (formerly $24.99).