For every share you own, you’ll suddenly have 10. The stock price will look cheaper, making it more accessible to employees and retail investors.
But the real question is: Should you buy before the split?
The short answer: The split itself is just mechanics. What matters is why the company is doing so well that it even needs one.
Stock Splits Don’t Create Value, But They Tell a Story
A stock split doesn’t make your investment worth more.
It’s like exchanging a S$100 note for 10 pieces of S$10 notes.
The value is the same, just divided into smaller pieces.
The real message behind it is that Netflix’s share price climbed high enough to need a split because its business has been performing strongly.
1. Don’t Be Fooled by the “Brazilian Blip”
When Netflix reported its third-quarter 2025 (3Q’25) results, headlines focused on an “earnings miss.”
But it’s not as bad as it sounds.
The Charge: The company recorded a US$619 million tax charge following an unfavourable Brazilian Supreme Court ruling.
This one-off cost trimmed margins from 31.5% to 28%.
The Context: The charge spans nearly four years, from 2022 through Q3’25.
Only about 20%, or roughly US$124 million, relates to 2025.
The Reality: Management called it a “cost of doing business.”
The company remains financially strong. Free cash flow (FCF) for the first nine months of 2025 rose 37% year on year to US$7.6 billion, with full-year FCF expected to reach around US$9 billion.
The takeaway is simple. The tax noise is temporary. The fundamentals are what count.
2️. The Content and IP Flywheel is Spinning Faster
Content has always been Netflix’s strength, and the company is getting better at turning hits into long-term franchises.
Market Share Rising: Since late 2022, Netflix’s share of TV viewing has grown 15% in the US and 22% in the UK.
Series like Wednesday Season 2 (114 million views) and Happy Gilmore 2 (126 million views) show the creative engine is in full swing.
Monetising the Hits: Netflix is now expanding beyond streaming.
The online streaming company’s animated blockbuster KPop Demon Hunters (325 million views) became the platform’s most popular film ever and is translating that success into new revenue streams.
Licensing deals with Mattel (NASDAQ: MAT) and Hasbro (NASDAQ: HAS), apparel tie-ins, and live experiences are helping to build valuable franchises that reach far beyond the screen.
3️. Advertising and AI: The Next Growth Levers
Netflix’s next growth phase is already underway, with new revenue sources that promise higher margins over time.
Advertising Momentum: The ad-supported tier is still small but growing fast.
US upfront commitments more than doubled in 3Q’25, and ad revenue is on track to more than double in 2025.
As the ad infrastructure matures, Netflix will be able to convert more non-paying users into paying ones while attracting premium advertisers.
GenAI for Efficiency: Netflix is also applying Generative AI to boost productivity.
It has used GenAI to de-age actors in Happy Gilmore 2, saving both time and cost.
The technology is also being tested in areas like content discovery, ad optimisation, and production efficiency.
While not an immediate earnings driver, AI could become an important source of margin improvement in the years ahead.
The Bottom Line: A Premium That’s Earned
The stock split will reduce Netflix’s share price from about US$1,238 to a little under US$124, but the change is purely cosmetic.
The premium valuation exists for a reason.
Netflix has successfully evolved from a subscriber growth story into a business that generates strong cash flow across multiple revenue streams.
With resilient FCF, content that can be monetised beyond streaming, and a rapidly growing advertising business, Netflix remains one of the most compelling names in global entertainment.
The stock split on 17 November will not change the company’s value, but it may draw attention from a broader group of investors who now find the price more accessible.
Get Smart: The Split Doesn’t Matter, The Story Does
Stock splits are cosmetic, but the companies that can afford to do them usually have a story worth paying attention to.
Netflix has transformed itself into a cash-rich, diversified entertainment powerhouse. It is building franchises that extend far beyond the TV screen while generating billions in free cash flow.
If you believe in that journey, the upcoming split simply makes it easier to own a piece of it.
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Disclosure: Fel T. owns shares of Netflix.
