Netflix shares are down despite the company beating analyst expectations and continuing its growth from a record year, as cofounder Reed Hastings announced he would step away from the board.
Key Facts
- Netflix reported $12.2 billion in revenue, up 16% year-over-year, and $1.23 profit per share in the first quarter, beating consensus estimates and guidance of $12.1 billion in revenue and $0.76 earnings per share.
- The company attributed results to higher-than-expected subscription revenue.
- Netflix projected $12.5 billion in sales and $0.78 earnings per share for the second quarter—falling below Wall Street estimates of $12.6 billion and $0.84 earnings per share.
- In the earnings release, Netflix also announced its cofounder and chairman Hastings (net worth: $5.8 billion) will step away from his board position in June to focus on philanthropy and other pursuits.
- Shares of Netflix fell 9% following the release in after-hours and are up 18% this year.
Key Background
Netflix had a record 2025, with revenue reaching $45.2 billion in 2025, up 16% from the previous year, and net income hitting nearly $11 billion, up 26% from 2024. In 2025, Netflix leaned into live sports, with Netflix kicking off its 10-year contract to become the exclusive home to the WWE and securing exclusive streaming rights to both Christmas Day NFL games, which became the most streamed NFL games in history with approximately 30 million viewers per game. Original content also hooked viewers including shows “Squid Games” season 3 and “Stranger Things” season 5, as well as movies, particularly “KPop Demon Hunters,” which became the most-watched original film in the platform’s history with over 500 million views since its release in June 2025. In the first quarter, Netflix expanded its live content portfolio including exclusively streaming MLB Opening Night and broadcasting BTS’s Seoul concert in March. It also released original content including “Bridgerton” season 4, which received 40 million views within a week of its launch, and Ben Affleck and Matt Damon’s thriller “The Rip,” whichamassed 41.6 million views within three days. In March, Netflix raised its subscription prices for the second time in just over a year—hiking its Standard plan by $1 to $8.99 per month and the Standard and Premium ad-free tiers by $2 to $19.99 and $26.99 per month, respectively. Analysts estimate the hikes will contribute roughly $1.5 billion in incremental 2026 revenue.
Tangent
Netflix announced a bid to acquire Warner Brothers Discovery in December 2025, for $82.7 billion. Days after the deal was announced, Paramount Skydance launched a hostile all-cash bid, and Warner Brothers’ board decided to take Paramount’s revised $110.9 billion offer in late February. Though Netflix lost the deal, investors bought the dip in Netflix stock—even billionaire-run hedge funds including Ken Griffin’s Citadel and Philippe Laffont’s Coatue added millions of Netflix shares to their portfolio—boosting the stock. Paramount also had to pay Netflix a $2.8 billion “break-up fee,” which analysts expect can drive a competitive lead for the streaming giant if meaningfully invested into the business. In March, the company acquired Ben Affleck’s AI-powered filmmaking startup InterPositive for a reported $600 million. Netflix stock is up 18% this year and up more than 40% since its lows in February.
What To Watch For
In the second quarter, investors are looking for subscriber resilience after price hikes, M&A appetite post Warner Brothers fallout and the growth of Netflix’s ads revenue—especially whether investment into its live content is proving to be worthwhile. Netflix’s first ever exclusive streaming of an MMA fight between Rhonda Rousey and Gina Carano, as well as original series including “BEEF” season 2, “Stranger Things: Tales From ’85,” “Sweet Magnolias” season 5 and “Avatar: The Last Airbender Season 2,” are all to come.
This article was originally published on forbes.com and all figures are in USD.
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