Netflix terminated its agreement to acquire assets from Warner Bros. Discovery. The company withdrew after Paramount Skydance submitted a superior bid. Warner Bros. Discovery paid Netflix a $2.8 billion breakup fee in February 2026.
Netflix raised its full-year 2026 free cash flow guidance following the receipt. The forecast increased by $1.5 billion. Total free cash flow is now expected to reach approximately $12.5 billion. Management attributed the revision to the after-tax impact of the termination fee.
Co-CEOs described the acquisition as no longer financially attractive following the rival bid. The decision signals a focus on capital discipline and confidence in the company's standalone strategy.