Key Highlights

  • Shares of Netflix declined approximately 9% during after-hours and early European trading sessions following Q2 projections that fell short of analyst expectations.
  • First quarter performance exceeded forecasts — $12.25B in revenue compared to estimated $12.17B, with adjusted EPS reaching $1.23 versus projected $0.76.
  • Second quarter revenue projection of $12.57B fell below analyst estimate of $12.64B; EPS forecast of $0.78 trailed expected $0.84.
  • Co-founder and board chairman Reed Hastings announced he will step down from the board when his term concludes in June.
  • The streaming service delivered these results following its unsuccessful attempt to acquire Warner Bros. Discovery, which went to Paramount Skydance instead.

Netflix delivered solid first quarter results, yet investors focused their attention on future projections rather than past achievements. Shares tumbled approximately 9% in after-hours and early European sessions after the company revealed second quarter guidance that significantly trailed Wall Street expectations.

First quarter revenue reached $12.25 billion, surpassing the consensus forecast of $12.17 billion. Adjusted earnings per share climbed to $1.23 — substantially exceeding analyst expectations of $0.76. This represents a significant improvement from Q1 last year’s $0.66 EPS. These per-share metrics reflect the company’s 10-for-1 stock split executed in mid-November.


NFLX Stock Card
Netflix, Inc., NFLX

Investor reaction centered on Q2 projections. The streaming platform provided Q2 revenue guidance of $12.57 billion, falling below analyst expectations of $12.64 billion. Projected EPS of $0.78 trailed the $0.84 consensus, while operating income guidance of $4.11 billion came in substantially below the anticipated $4.34 billion.

Co-CEO Greg Peters addressed investor concerns during the earnings conference call. “Of course, it’s early in the year,” he stated. “There’s still plenty of time to go, plenty of work left to do.”

Bloomberg Intelligence analyst Geetha Ranganathan expressed skepticism. “This was supposed to be them telling us why they’re going to do just fine without Warner Bros. Discovery,” she commented, “and I’m not so sure that this report necessarily does that.”

Hastings to Exit Board Position

Alongside financial results, the company revealed that co-founder and chairman Reed Hastings plans to step down from the board when his current term concludes in June. Hastings led the transformation of Netflix from its origins as a DVD-by-mail service into the dominant global streaming platform operating today.

The company has yet to announce succession plans or identify a replacement.

Impact of Warner Bros. Discovery Acquisition Outcome

These earnings represent Netflix’s first quarterly report since withdrawing from the competition to purchase Warner Bros. Discovery. Paramount Skydance emerged victorious in that bidding process and committed to covering the deal breakup fee. Warner Bros. shareholders will cast their votes on the $110 billion proposal next week.

CFO Spencer Neumann assured investors the failed acquisition would have minimal impact on Netflix’s operating margin projections. “Some of our initially planned costs for the deal, they won’t fully materialize,” he explained, adding that certain expenses were accelerated into 2026.

BMO Research analyst Brian Pitz suggested prior to earnings that stepping away from the WBD acquisition could enable investors to concentrate on Netflix’s fundamental business operations and expanding ad-supported subscription tier.

The streaming service implemented subscription price adjustments in early 2026 — marking the second increase within slightly more than a year. The ad-supported Standard plan increased $1 to $8.99 monthly, while Standard and Premium tiers climbed $2 to $19.99 and $26.99 respectively.

Bank of America analyst Jessica Reif Ehrlich characterized the price adjustments as a “validator of Netflix’s confidence in their underlying strength and durability.”

BMO’s Pitz projected the pricing changes would generate approximately $1.5 billion in additional revenue for 2026, accounting for 3.3% growth from price increases alone.

By 0603 GMT Friday, Netflix’s Frankfurt-listed shares declined 8.7%. The New York-listed stock had gained roughly 15% year-to-date prior to the earnings announcement.