Netflix shares fall following forecast miss, co-founder Reed Hastings to leave in June
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The news: Netflix shares have sunk after the streaming giant issued its second quarter earnings per share forecast of 78 US cents, less than the market expectations for 84 cents, and announced that co-founder and chair Reed Hastings would step down in June.
The numbers: AT 9:38am AEST, Netflix’s Nasdaq-listed shares had fallen 9% to USD98.13 ($136.98) in after hours trade.
Netflix said revenue for the three months to June is expected to come in at USD12.57 billion, also below expectations for USD12.64 billion, according to Bloomberg data.
However, in the three months to March, revenue lifted 16% to USD12.3 billion, slightly ahead of the USD12.2 billion expected by the market. Earnings per share also exceeded expectations at USD1.23, compared to the expected 76 US cents.
The context: The March quarter beat is partly driven by a USD2.6 billion breakup fee Paramount paid to Netflix after the streaming giant’s acquisition offer was beaten.
The results and forecasts are the first to be issued since Netflix walked away from plans to acquire Paramount Skydance following a bidding war with Warner Bros Discovery.
Reed Hastings leaves Netflix after 29 years with the company and served as CEO between 1999 and 2023.
What they said: “Netflix changed my life in so many ways, and my all‑time favorite memory was January 2016, when we enabled nearly the entire planet to enjoy our service,” Hastings said.
“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.”
The sources: Netflix Q1 2026 shareholders letter, Bloomberg, Bloomberg
