NFLX · 10-Q · 2026Q2 · Full report

WBD Transaction Termination

NETFLIX INC · 2026-07-17 · Importance 55 · Surprise 60 · In source text

Netflix received a $2.8 billion termination fee during the first quarter of 2026 after the proposed Warner Bros. Discovery (WBD) transaction was terminated. The termination increased interest and other income and materially contributed to the company’s six-month net income and operating cash flow. On February 27, 2026, Netflix terminated all financing arrangements related to the proposed WBD transaction; no amounts had been borrowed, but approximately $85 million of debt issuance costs were recognized from terminating the arrangements. Netflix also reported $586 million of acquisition-related cash outflows during the six months ended June 30, 2026.

Key facts

• On February 27, 2026, WBD terminated the Amended and Restated Merger Agreement and PSKY, on behalf of WBD, paid a $2.8 billion termination fee to Netflix, which Netflix recorded in Interest and other income (expense) in Q1 2026. source
• Interest and other income (expense) for the six months ended June 30, 2026 includes a $2.8 billion termination fee received during the first quarter of 2026 in connection with the termination of the WBD transaction. source
• The Company received a $2.8 billion termination fee in connection with the termination of the WBD transaction in the first quarter of 2026 and recorded approximately $85 million of debt issuance cost amortization in connection with termination of financing arrangements associated with the WBD transaction in the first quarter of 2026. source
• Upon termination of the Amended and Restated Merger Agreement on February 27, 2026, all related financing arrangements to fund the previously proposed WBD transaction were terminated and no amounts had been borrowed under any of the financing arrangements. source
• The increase in interest expense for the six months ended June 30, 2026 was primarily driven by higher amortization of debt issuance costs, including approximately $85 million recognized in connection with the termination of financing arrangements associated with the WBD transaction in the first quarter of 2026. source

Impact estimates