Netflix beats quarter; founder exits

Netflix beat Wall Street in the first quarter, then watched its stock slide after a softer second-quarter forecast and Reed Hastings’ planned exit from the board. (deadline.com) The streaming company reported $12.25 billion in revenue for the quarter ended March 31, up 16% from a year earlier, and diluted earnings per share of $1.23. Analysts had expected about $12.18 billion in revenue and $0.76 a share, according to Deadline and market data cited by Reuters. (deadline.com, whbl.com) Netflix said first-quarter operating income rose 18% and its operating margin reached 32.3%, while its full-year 2026 outlook stayed at $50.7 billion to $51.7 billion in revenue and a 31.5% operating margin. For the current quarter, it forecast slower revenue growth and earnings per share below analysts’ expectations. (sec.gov, variety.com, whbl.com) The market reaction turned on what comes next, not what just happened. Netflix shares fell as much as 10% in after-hours trading on April 16 after investors focused on the weaker near-term guidance and the leadership news. (deadline.com, hollywoodreporter.com) Hastings, 65, said he will not stand for re-election at Netflix’s annual meeting in June, ending a 29-year run at the company he co-founded in 1997. Netflix said he plans to focus on philanthropy and other pursuits. (whbl.com, techcrunch.com) His departure closes the last formal chapter of Netflix’s founding era. Hastings had already stepped down as co-chief executive in January 2023, leaving Ted Sarandos and Greg Peters as co-chief executives while remaining board chair. (techcrunch.com, reuters.com) Netflix is making this transition while trying to keep growth going after years of saturation fears in the United States and Canada. Greg Peters said on the earnings call that the company finished 2025 with more than 325 million paid memberships and is reaching an audience “approaching a billion people.” (whbl.com, marketbeat.com) The company no longer reports subscriber additions every quarter, so investors now lean more heavily on revenue, margins, advertising, and guidance. Netflix said first-quarter results were helped by slightly higher-than-planned subscription revenue, and it said its advertising business remains on track to roughly double this year to about $3 billion. (sec.gov, variety.com) The quarter also landed weeks after Netflix abandoned its pursuit of Warner Bros. Discovery assets, a deal Reuters described as potentially transformative. That left investors parsing a simpler question on April 16: whether Netflix can keep expanding on its own fast enough to justify a stock that had already risen about 15% in 2026 before earnings. (whbl.com, deadline.com)