Netflix announces new AI tools for advertisers, subtitle localization, promotions, and more in earnings report

Netflix announced its fourth quarter financial results for fiscal year 2025 on January 20, 2026. In the report, Netflix explained that it is using AI for recommendation tools that suggest titles to users, tools that can generate custom advertisements based on programs and content, and subtitle localization, and revealed plans to further enhance its AI tools in the future.

(PDF file) Letter to Shareholders [Netflix]
https://s22.q4cdn.com/959853165/files/doc_financials/2025/q4/FINAL-Q4-25-Shareholder-Letter.pdf

Netflix - Financials - Quarterly Earnings
https://ir.netflix.net/financials/quarterly-earnings/default.aspx

Netflix says it's using AI to improve subtitle localization. | The Verge
https://www.theverge.com/news/864598/netflix-says-its-using-ai-to-improve-subtitle-localization

According to Netflix's fourth-quarter financial results for fiscal year 2025, the number of paid subscribers worldwide reached 325 million, and revenue increased 17.6% year-on-year due to increased membership and subscription price hikes. Furthermore, the ad-supported plan introduced at the end of 2022 has been successful, and advertising revenue in 2025 increased by more than 2.5 times compared to 2024, and Netflix expects advertising revenue to double again in 2026.

Netflix's fourth-quarter 2025 revenue is expected to increase 17.6% year-on-year to ¥1.9 trillion, with paid subscribers reaching 325 million - GIGAZINE

The report also details the use of AI to improve user experience and support advertisers. In 2025, Netflix announced a framework for advertisers to create ' custom ads powered by generative AI ,' and plans to further develop this initiative in 2026. Netflix also introduced advanced AI models as an automated workflow for advertising concepts, significantly speeding up the campaign process.

In terms of promotion, Netflix is introducing AI-driven tools to assist with merchandising and help users find content relevant to their preferences. In April 2025, it was reported that Netflix was testing a new search feature powered by OpenAI's AI for the iOS Netflix app. This feature recommends content without requiring users to enter specific keywords, such as 'my current mood.' At the time of writing, AI-powered search was only available for the iOS Netflix app in certain countries.

Netflix is testing an OpenAI-powered search engine to help subscribers find shows based on their mood, not just genre or actor name - GIGAZINE

AI is also being used to improve subtitle localization, making it easier for works to reach more viewers around the world. Additionally, in its second quarter 2025 financial results announced in July 2025, Netflix revealed thatit used generative AI to reduce costs in its original drama series ' Eternauta ,' demonstrating its commitment to using AI in video production.

Netflix co-CEO Ted Sarandos said during an earnings call in October 2025, 'Even in a world filled with AI music, AI will primarily be used as a tool to help musicians take their sound in new directions. While AI may have a short-term impact on viewing user-generated content, it will not replace the library we want to build. Rather, AI will be a tool that enables Netflix's creative partners to tell stories better, faster, and in new ways.'