Netflix shares fell following its first-quarter earnings report, which included a key governance change.
This also marks the company’s first earnings report since it walked away from its proposed acquisition of Warner Bros. Discovery’s streaming and film assets.
The streaming giant’s revenue grew 16% year-over-year to US$12.25 billion and also beat Wall Street expectations of $12.18 billion.
Net income came in at $1.23 per share, or $5.28 billion, which is well above expectations of 76 cents per share and nearly double the 66 cents per share, or $2.89 billion, reported the same time last year.
The company attributed the rise in net income to higher-than-projected operating income and the $2.8 billion termination related to the Warner Bros. transaction.
Netflix said its full-year 2026 guidance remains unchanged and still expects revenue between $50.7 billion and $51.7 billion, representing growth of 12%-14%.
The streaming giant plans to do this through continued membership growth and a projected doubling of its ad revenue of around $3 billion.
The company also recently raised subscription prices across all tiers for customers in the U.S.
For the second quarter, Netflix expects revenue to increase by 13% and reiterated its earlier warning that content spending would be weighted in the first half of the year due to the timing of title launches.
Netflix added that it expects the second quarter to have the highest year-over-year content amortisation growth rate in 2026, before lowering in the second half of the year.
Netflix co-founder and current chairman Reed Hastings also announced his exit from the board when his term expires in June.
He stepped down from his role in 2023, handing over the reins to Greg Peters, who is now co-CEO alongside Ted Sarandos.
“My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come,” Hastings said in a letter to shareholders.
“A special thanks to Greg and Ted, whose commitment to Netflix’s greatness is so strong that I can now focus on new things.”
At the time of writing, Netflix (NASDAQ) shares finished 0.07% higher at $107.79, but fell 8.88% to $98.22 in after-market trading. Its market cap is $455.11 billion.
