Netflix Inc (NASDAQ:NFLX, XETRA:NFC) is expected to report first quarter 2026 results slightly ahead of its own guidance, according to UBS analysts, who also pointed to a combination of recent price increases and expanding advertising efforts as key drivers of growth this year.
Ahead of the report, the firm reiterated its ‘Buy’ rating on the stock, with a 12-month price target of $130, implying roughly 31% upside from current levels.
UBS expects Netflix’s Q1 results to come in slightly ahead of company guidance, forecasting foreign-exchange-neutral revenue growth of 14.4% and operating income growth of 17%.
For the full year, the analysts project revenue to grow 14% with operating income rising 26%, supported by improved margins and lower costs.
A major theme heading into the print is Netflix’s pricing strategy. The company recently raised subscription prices in the US, increasing its ad-supported tier by $1 and its standard and premium plans by $2. UBS believes this move will help accelerate average revenue per member, noting that additional price hikes in international markets are likely to follow.
The analysts expect these pricing actions, combined with scaling advertising monetization, to provide “further tailwinds” to revenue growth. They also highlighted the rapid expansion of Netflix’s ad-supported business, projecting ad revenue to double year-over-year to $3.1 billion in 2026, aided by new demand-side platform partnerships, including with Amazon.
Content remains another pillar of the growth outlook. Netflix is entering the year with a strong slate, including returning hit series such as Bridgerton, The Night Agent, The Lincoln Lawyer, and ONE PIECE, alongside new films and a growing lineup of live events like the World Baseball Classic and NFL Christmas games. UBS noted the company is “still positioned to benefit from its solid slate of content this year,” even as competition intensifies.
At the same time, UBS flagged signs of moderating engagement growth. Its internal viewership tracker showed total consumption across Netflix’s global top 10 titles rose just 1% year-over-year in the first quarter, a slowdown from 9% growth in the previous quarter, which benefited from strong comparisons tied to Squid Game.
The analysts wrote that “engagement remains the main focus among investors,” particularly as streaming competition and free ad-supported television platforms gain traction.
Regionally, engagement trends were mixed. US monthly active users were roughly flat year-over-year, while international users declined modestly. App download trends also remain uneven, though early April data signals a rebound.
Despite these softer engagement signals, UBS sees multiple levers supporting financial performance, including pricing, advertising, and potential content licensing opportunities as competitors restructure.
The firm also expects free cash flow to reach $13 billion in 2026, enabling a return to share buybacks.
Netflix will report its Q1 earnings on April 16.