You should pay attention to this…

Netflix is cutting about 1,000 people, roughly 6 percent of the company, and it is the biggest round they have ever done. Bigger than 2022. The part that makes it strange is the memo, which frames the business as strong and growing and says they remain on track to deliver the full year forecast.

So let’s actually go through the numbers, because I do not think this part has been talked about enough.

2025 revenue was 45.2 billion, up 16 percent. Net income was 11 billion, up from 8.7 billion the year before. Free cash flow went from 6.9 billion to 9.5 billion. Operating margin improved. None of that is a company in trouble.

What is happening is that the growth is decelerating. Revenue growth is guided to roughly 12 to 14 percent for 2026, down from 16 percent last year. Engagement looks soft. And the cuts landed in tech, product and legal rather than anywhere near content.

Two things worth sitting with. One, maybe they found a more efficient way to do that work, which in 2026 usually means AI, and this is an early look at what that does to headcount at a company this size. Two, the Warner Bros. Discovery deal falling through may matter more than people are treating it. If you staff up expecting to absorb that catalog and then you do not get it, you are carrying people for a business that never showed up.

The bigger point is the one I keep coming back to. The general economy is in an odd state, AI is a real disruptor the way any technology that powerful is, and the economics of it have not leveled out yet. OpenAI still is not profitable. There is going to be a lot of shaking and moving over the next couple of years.

If the most profitable streaming service has to make an adjustment, the smaller guys are going to have to make one too.

Earnings call is October 20. Tell me what you think.

https://rippaverse.com/RAU