Netflix (NFLX) Stock Falls 9% After Weak Q2 Guidance and Hastings Exit

TLDR

• Netflix stock dropped roughly 9% in after-hours and early European trading after Q2 revenue and earnings guidance came in below Wall Street estimates.
• Q1 results beat expectations — revenue of $12.25B vs. $12.17B est., and adjusted EPS of $1.23 vs. $0.76 est.
• Q2 revenue guidance of $12.57B missed the $12.64B estimate; EPS guidance of $0.78 missed the $0.84 expected.
• Co-founder and chairman Reed Hastings said he will not seek re-election when his board term expires in June.
• Netflix also reported its first quarter results since losing the Warner Bros. Discovery acquisition bid to Paramount Skydance.

Netflix posted a strong Q1 but the market zeroed in on where the company is heading, not where it’s been. The stock fell around 9% in after-hours and early European trading after second quarter guidance landed well below what Wall Street had pencilled in.

Q1 revenue came in at $12.25 billion, ahead of the $12.17 billion consensus estimate. Adjusted earnings per share hit $1.23 — well above the $0.76 analysts expected. That compares to $0.66 EPS in Q1 last year. The company completed a 10-for-1 stock split in mid-November, which the per-share figures reflect.

Netflix, Inc., NFLX

But guidance for Q2 is what moved the stock. Netflix guided for Q2 revenue of $12.57 billion, short of the $12.64 billion the Street was looking for. EPS guidance of $0.78 also missed the $0.84 estimate, and operating income guidance of $4.11 billion fell well below the $4.34 billion expected.

Hastings Steps Down From Board

The results were also accompanied by news that co-founder and chairman Reed Hastings will not seek re-election when his board term expires in June. Hastings transformed Netflix from a mail-order DVD business into the global streaming giant it is today.

No replacement or succession details were immediately announced.

Warner Bros. Discovery Fallout

This was Netflix’s first earnings report since it walked away from the battle to acquire Warner Bros. Discovery. Paramount Skydance won that bid and agreed to pay the deal breakup fee. Warner Bros. shareholders are set to vote on the $110 billion offer next week.

BMO Research analyst Brian Pitz said before the results that a clean break from the WBD deal could let investors refocus on Netflix’s core business and its growing ad-supported tier.

Netflix also raised subscription prices in early 2026 — the second increase in just over a year. The ad-supported Standard plan went up $1 to $8.99/month, while Standard and Premium tiers rose $2 to $19.99 and $26.99 respectively.

Bank of America analyst Jessica Reif Ehrlich called the price increases a “validator of Netflix’s confidence in their underlying strength and durability.”

BMO’s Pitz estimated the hikes would add roughly $1.5 billion in incremental revenue for 2026, representing 3.3% growth from pricing alone.

By 0603 GMT on Friday, Netflix’s Frankfurt-listed stock was down 8.7%. Netflix stock in New York had been up about 15% year-to-date before the results.

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