Overview
- Netflix shares slid about 10% Friday following its April 16 earnings release and a guidance update that kept 2026 revenue targets in place.
- Quarterly revenue reached $12.25 billion with earnings of $1.23 per share, helped by a $2.8 billion termination fee tied to Warner Bros. Discovery that also lifted free cash flow to $5.1 billion.
- Management held its full-year sales outlook and flagged lower near-term profitability, guiding a second-quarter operating margin near 32.6% versus 34.1% a year ago, while raising full-year free cash flow guidance to roughly $12.5 billion.
- Netflix is leaning on advertising and live programming for growth, with the ad-supported plan driving over 60% of new sign-ups in markets where it is offered and the advertiser roster now above 4,000.
- Reed Hastings will leave the board in June, and some investors are buying the dip, with Morgan Stanley reiterating an Overweight rating and a $115 target and ARK Invest adding shares.