Netflix posted a strong Q1 but the market zeroed in on where the company is heading, not where it’s been. The stock fell around 9% in after-hours and early European trading after second quarter guidance landed well below what Wall Street had pencilled in.
NETFLIX $NFLX Q1’26 EARNINGS HIGHLIGHTS
Revenue: $12.25B (Est. $12.17B)
; +16% YoY
Reed Hastings to leave board when term ends
Q2 Guide:
— Wall St Engine (@wallstengine) April 16, 2026
Q1 revenue came in at $12.25 billion, ahead of the $12.17 billion consensus estimate. Adjusted earnings per share hit $1.23 — well above the $0.76 analysts expected. That compares to $0.66 EPS in Q1 last year. The company completed a 10-for-1 stock split in mid-November, which the per-share figures reflect.
But guidance for Q2 is what moved the stock. Netflix guided for Q2 revenue of $12.57 billion, short of the $12.64 billion the Street was looking for. EPS guidance of $0.78 also missed the $0.84 estimate, and operating income guidance of $4.11 billion fell well below the $4.34 billion expected.
Co-CEO Greg Peters tried to calm concerns on the earnings call. “Of course, it’s early in the year,” he said. “There’s still plenty of time to go, plenty of work left to do.”
Bloomberg Intelligence analyst Geetha Ranganathan was less reassured. “This was supposed to be them telling us why they’re going to do just fine without Warner Bros. Discovery,” she said, “and I’m not so sure that this report necessarily does that.”
The results were also accompanied by news that co-founder and chairman Reed Hastings will not seek re-election when his board term expires in June. Hastings transformed Netflix from a mail-order DVD business into the global streaming giant it is today.
No replacement or succession details were immediately announced.
This was Netflix’s first earnings report since it walked away from the battle to acquire Warner Bros. Discovery. Paramount Skydance won that bid and agreed to pay the deal breakup fee. Warner Bros. shareholders are set to vote on the $110 billion offer next week.
CFO Spencer Neumann told investors there would be no material impact on Netflix’s operating margin outlook as a result of the failed deal. “Some of our initially planned costs for the deal, they won’t fully materialize,” he said, noting some costs were pulled forward into 2026.
BMO Research analyst Brian Pitz said before the results that a clean break from the WBD deal could let investors refocus on Netflix’s core business and its growing ad-supported tier.
Netflix also raised subscription prices in early 2026 — the second increase in just over a year. The ad-supported Standard plan went up $1 to $8.99/month, while Standard and Premium tiers rose $2 to $19.99 and $26.99 respectively.
Bank of America analyst Jessica Reif Ehrlich called the price increases a “validator of Netflix’s confidence in their underlying strength and durability.”
BMO’s Pitz estimated the hikes would add roughly $1.5 billion in incremental revenue for 2026, representing 3.3% growth from pricing alone.
By 0603 GMT on Friday, Netflix’s Frankfurt-listed stock was down 8.7%. Netflix stock in New York had been up about 15% year-to-date before the results.
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