California. Netflix capped last year with another solid financial performance, but slowing subscriber growth renewed investor concerns and underscored the stakes of its contested $72 billion bid to acquire Warner Bros. Discovery’s movie studio and add HBO Max to its streaming lineup.

The company’s fourth-quarter results, announced Tuesday, exceeded Wall Street expectations. Netflix ended the year with more than 325 million subscribers worldwide, indicating it added about 23 million subscribers since 2024.

That increase marked a sharp slowdown from the 41 million subscribers added in 2024, heightening fears that Netflix’s growth may have peaked following the 2022 launch of its lower-priced, advertising-supported tier, which initially fueled a surge in sign-ups.

Management also projected first-quarter profit below analysts’ forecasts and said the company would suspend share buybacks while pursuing the Warner Bros. deal. While Netflix expects advertising revenue to double, it forecasts overall revenue growth slowing from 16% in 2025 to between 12% and 14% this year.

“Overall, this points to a challenging start to the year,” said Thomas Monteiro, an analyst at Investing.com.

Netflix shares fell nearly 5% in extended trading, despite the stronger-than-expected quarterly results. The company reported net income of $2.4 billion, or 56 cents per share, up 29% from a year earlier. Revenue rose 18% to more than $12 billion.

Those financial results were overshadowed by the high-stakes bidding war for Warner Bros. Discovery. The contest took another turn Tuesday when Netflix converted its original stock-and-cash proposal into an all-cash offer, a move aimed at simplifying the deal and making it easier for Warner Bros. Discovery shareholders to fend off rival interest from Paramount.

Although Warner Bros. Discovery has reiterated its commitment to the Netflix deal, Paramount has shown no sign of backing down and could still sweeten its counteroffer.

Netflix co-CEO Ted Sarandos appeared to issue a warning to rivals during a conference call, recalling how the company had outmaneuvered competitors such as Walmart and the now-defunct Blockbuster during its early days as a DVD-by-mail service.

“We are no strangers to competition, and we are no strangers to change,” Sarandos said.

Beyond rival bidders, Netflix must also convince USregulators that combining HBO with the country’s largest streaming platform would not stifle competition or further drive up prices, which have already risen in recent years.

That uncertainty has weighed on Netflix’s stock, which has fallen about 20% since the Warner Bros. Discovery agreement was announced last month. The overhang is expected to persist, as Netflix does not anticipate completing the acquisition until Warner Bros. Discovery spins off its cable television business — a process expected to take six to nine months.

“We are energized as ever to achieve our mission to entertain the world,” Sarandos said.