Overview
- Netflix, which reported Thursday, posted revenue of $12.25 billion and earnings of $1.23 per share, both above Wall Street estimates.
- Shares dropped about 8% to 10% after hours as second‑quarter revenue and EPS guidance came in below consensus.
- Management said second‑quarter margins will dip year over year because content costs are front‑loaded, with a rebound expected in the second half to meet the full‑year margin goal.
- A $2.8 billion termination fee from the abandoned Warner Bros. Discovery pursuit boosted reported profit and free cash flow and lifted the 2026 FCF outlook to about $12.5 billion, but the fee is not recurring.
- Netflix kept its full‑year revenue and margin targets, reiterated an ads goal near $3 billion for 2026, resumed buybacks with $1.3 billion in repurchases, and said co‑founder Reed Hastings will leave the board in June.