NFLX · 10-Q · 2026Q3 · Full report

WBD Transaction Termination

NETFLIX INC · 2026-10-21 · Importance 74 · Surprise 100 · Contradicted

Netflix received a $2.8 billion termination fee during the first quarter of 2026 after the WBD transaction was terminated. The fee increased nine-month interest and other income by $2.820 billion to $2.947 billion from $127 million and was included in income before taxes. Netflix also recorded approximately $85 million of debt-issuance-cost expense when financing arrangements for the proposed WBD transaction were terminated. The terminated financing arrangements had no borrowings outstanding, and their related expenses were not material apart from the debt-cost amortization described above.

Key facts

• For the nine months ended September 30, 2026, NETFLIX INC reported interest and other income (expense) of $2,946,833 thousand versus $126,986 thousand in the nine months ended September 30, 2025, an increase primarily due to the $2.8 billion termination fee. source
• On February 27, 2026, Paramount Skydance Corporation (PSKY), on behalf of WBD, paid a $2.8 billion termination fee to Netflix in accordance with the Amended and Restated Merger Agreement, and the $2.8 billion termination fee was recorded in Interest and other income (expense) during the first quarter of 2026. source
• NETFLIX INC received a $2.8 billion termination fee in the first quarter of 2026 in connection with the termination of the WBD transaction, which is included in interest and other income (expense) for the nine months ended September 30, 2026. source

Impact estimates