NFLX · Netflix, Inc.

Netflix reported strong Q1 2026 financial results, with revenue growing 16% year-over-year to $12.25 billion, slightly exceeding guidance due to higher-than-forecasted membership growth and favorable foreign exchange movements. Operating income rose 18% to $3.96 billion, resulting in an operating margin of 32.3%, an improvement from 31.7% in the prior year period. The most significant variance in the quarter was the diluted EPS of $1.23, which substantially surpassed the company's forecast of $0.76. This outperformance was driven by a $2.8 billion termination fee related to the Warner Bros. transaction, recognized in interest and other income, alongside higher operating income. The company highlighted progress in its strategic pillars, noting that its primary internal quality engagement metric hit an all-time high. The advertising business remains a key growth driver, with revenue on track to double year-over-year to $3 billion in 2026; the ads plan now represents over 60% of all Q1 sign-ups in ads-supported countries. Management reiterated full-year 2026 guidance for revenue of $50.7-$51.7 billion and an operating margin of 31.5%. In a separate disclosure, the company announced that co-founder and Executive Chairman Reed Hastings will not stand for re-election at the 2026 annual meeting, marking a significant governance transition as his current term expires.