Netflix Beats Q1 Revenue but Q2 Outlook Disappoints

Netflix reported Q1 2026 revenue of $12.25 billion, beating the $12.18 billion analyst estimate and growing 16% from a year earlier. Net income jumped 82.8% year over year, but a soft Q2 earnings forecast sent shares down 9% in extended trading.

Headline Numbers

Full-year revenue guidance held at $50.7 billion to $51.7 billion, implying 12% to 14% growth. Netflix reiterated its $3 billion advertising revenue target for 2026, double the prior year, signaling that the ad-supported tier continues to scale even as overall subscriber growth slows.

Why the Stock Fell

The Q2 earnings-per-share forecast of $0.78 missed Wall Street's $0.84 expectation. Investors interpreted the gap as a sign that content amortization and live-event spending will compress near-term margins, even though the long-term ad story remains intact. The 9% after-hours drop wiped out recent gains.

Strategic Backdrop

The earnings report also disclosed that co-founder Reed Hastings will leave the board in June. Together, the management transition and softer near-term guidance gave investors plenty to debate.