NFLX Stock Plummets After-Hours On Outlook Miss; Chair Reed Hastings Announces Departure From Board

• The streaming company also said that its chairman and co-founder Reed Hastings will step down from the board once his term expires in June.
• Meanwhile, Netflix forecast a 13.5% growth in quarterly revenue to $12.57 billion. 
• The company also said that it had surpassed 325 million subscribers and added that it expects to reach about $3 billion this year in advertising.

Shares of Netflix Inc. (NFLX) sank nearly 9% in Thursday’s extended trading hours after the company forecast second quarter (Q2) earnings below Wall Street expectations.

Additionally, the streaming company said that its chairman and co-founder Reed Hastings will step down from the board once his term expires in June.

Earnings Snapshot

For the first-quarter of 2026, Netflix posted revenues of $12.25 billion, a 16.2% growth year-on-year, and ahead of consensus estimates of $12.17 billion, based on data from Fiscal.ai.

The company posted earnings per share of $1.23, soaring past analysts’ expectations of $0.77 per share. However, despite the strong Q1 results, Netflix provided a Q2 outlook that came in below expectations. The company said it was expecting to post EPS of $0.78, below consensus estimates of $0.84. Meanwhile, Netflix forecast a 13.5% growth in quarterly revenue to $12.57 billion.

Leadership Exit

Netflix also said in its earnings update that Hastings would not stand for re-election to the company’s board as he shifts his efforts to philanthropy and other pursuits.

Business Focus

In a call with investors, the company reaffirmed its 2026 outlook of 12–14% revenue growth and a 31.5% operating margin, stating that there was no material impact from costs related to the Warner Bros. Discovery (WBD) deal that did not materialize. The company also said that it had surpassed 325 million subscribers.

In terms of advertising, Netflix said it expects to reach about $3 billion this year, alongside improved monetization via pricing and distribution. “We have increasingly sophisticated pricing and pricing plans, and we have a great and growing ad business,” CEO Ted Sarandos said.

In March, Netflix raised its subscription prices across plans in the U.S., with ad-supported plans raised to $8.99 a month, and standard plans starting at $19.99.

Netflix also provided an update on its expansion into live sports, gaming, and new formats, adding that the World Baseball Classic in Japan drove a record viewership of 31.4 million viewers, the company said.

Warner Bros. Deal

Speaking of the much-discussed takeover bid for WBD, the company said that it dropped the high-profile deal as the cost grew beyond the net value to its business and shareholders.

“Historically, we've been builders and not buyers, so there were certainly questions internally and externally about our ability to do a deal of this size,” Sarandos said. “The most important benefit of this entire exercise, though, was that we tested our investment discipline.”

In February, Netflix walked away from a high-profile takeover bid for Warner Bros. Discovery (WBD) after it declined to match an improved bid for a rival offer from Paramount Skydance Corp. (PSKY). The streaming giant had previously proposed an all-cash deal at about $27.75 per share, totaling about $82.7 billion, including debt. However, PSKY’s bid came in valued at nearly $111 billion, prompting Netflix to walk away rather than raise its bid.

How Did Stocktwits Users React?

On Stocktwits, retail sentiment around NFLX stock improved from ‘bullish’ to ‘extremely bullish’ over the past 24 hours amid ‘extremely high’ message volumes.

NFLX shares have gained more than 18% this year.

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