Netflix (NASDAQ:NFLX) Announces Earnings Results, Beats Expectations By $0.47 EPS

Key Points

• Netflix reported Q1 EPS of $1.23, beating estimates by $0.47 on revenue of $12.25B, but issued Q2 EPS guidance of $0.78—below consensus—muting the upside from the quarter's beat.
• The company maintained full‑year 2026 targets (revenue growth 12%–14% and a 31.5% operating margin) and said it plans to roughly double advertising to about $3 billion, citing strong ad‑business momentum (≈4,000 advertisers, programmatic >50%).
• Reed Hastings will leave the board and sizable insider sales (including Hastings' 420,550‑share sale) plus the cautious near‑term outlook contributed to after‑hours de‑risking by investors.

Netflix (NASDAQ:NFLX - Get Free Report) posted its quarterly earnings data on Thursday. The Internet television network reported $1.23 EPS for the quarter, topping analysts' consensus estimates of $0.76 by $0.47, FiscalAI reports. The company had revenue of $12.25 billion for the quarter, compared to analyst estimates of $12.17 billion. Netflix had a return on equity of 43.26% and a net margin of 24.30%.The business's revenue was up 16.2% on a year-over-year basis. During the same quarter in the previous year, the firm earned $6.61 earnings per share. Netflix updated its Q2 2026 guidance to 0.780-0.780 EPS.

Here are the key takeaways from Netflix's conference call:

• Maintained full‑year guidance for 2026 with revenue growth of 12%–14% and an operating margin target of 31.5%, explicitly including a plan to roughly double advertising to about $3 billion.
• Q1 engagement and membership momentum remains strong—view hours grew in line with H2 2025, the company's primary member quality metric hit a new high, and paid members exceed 325 million with large upside given ~45% household penetration and only ~5% global TV view share.
• Netflix walked away from the Warner Bros. deal on economic grounds but says WB‑related costs were largely within prior M&A guidance, that the exercise strengthened its M&A capabilities, and that there is no material impact to 2026 operating margin guidance.
• The ad business is expanding—advertiser count topped ~4,000 (up ~70% YoY in 2025), programmatic is >50% of non‑live ads, and management reaffirmed the $3 billion ad revenue target despite Nielsen methodology changes.
• Live events and new formats are driving incremental engagement—the World Baseball Classic drew 31.4 million viewers in Japan and produced the largest single sign‑up day there, while Netflix is ramping sports, podcasts, and kids gaming (e.g., the new Playground app) to capture daytime/mobile reach.

Netflix Stock Up 0.1%

NFLX stock traded up $0.08 during mid-day trading on Thursday, hitting $107.79. 62,146,504 shares of the company were exchanged, compared to its average volume of 47,539,887. The company has a debt-to-equity ratio of 0.51, a quick ratio of 1.19 and a current ratio of 1.19. Netflix has a 1-year low of $75.01 and a 1-year high of $134.12. The firm's 50 day simple moving average is $91.36 and its 200 day simple moving average is $98.65. The firm has a market cap of $455.11 billion, a P/E ratio of 42.66, a P/E/G ratio of 1.61 and a beta of 1.67.

Insider Activity at Netflix

In other Netflix news, Director Reed Hastings sold 420,550 shares of the business's stock in a transaction that occurred on Wednesday, April 1st. The stock was sold at an average price of $95.49, for a total value of $40,158,319.50. Following the sale, the director owned 3,940 shares in the company, valued at approximately $376,230.60. The trade was a 99.07% decrease in their position. The transaction was disclosed in a legal filing with the SEC, which is accessible through this link. The transaction was executed under a pre-arranged Rule 10b5-1 trading plan. Also, insider Cletus R. Willems sold 3,136 shares of the firm's stock in a transaction that occurred on Tuesday, February 10th. The stock was sold at an average price of $82.67, for a total transaction of $259,253.12. The disclosure for this sale is available in the SEC filing. Insiders have sold 1,511,233 shares of company stock valued at $138,320,982 over the last three months. Insiders own 1.37% of the company's stock.

Institutional Investors Weigh In On Netflix

Several institutional investors and hedge funds have recently added to or reduced their stakes in the business. State Street Corp lifted its stake in Netflix by 927.6% during the fourth quarter. State Street Corp now owns 176,780,995 shares of the Internet television network's stock worth $16,574,986,000 after purchasing an additional 159,578,053 shares during the last quarter. Price T Rowe Associates Inc. MD lifted its stake in shares of Netflix by 685.8% in the 4th quarter. Price T Rowe Associates Inc. MD now owns 86,058,878 shares of the Internet television network's stock valued at $8,068,882,000 after purchasing an additional 75,107,069 shares during the period. Morgan Stanley grew its holdings in Netflix by 903.0% in the fourth quarter. Morgan Stanley now owns 85,349,973 shares of the Internet television network's stock worth $8,002,414,000 after purchasing an additional 76,840,318 shares during the period. Bank of America Corp DE increased its holdings in shares of Netflix by 900.3% during the fourth quarter. Bank of America Corp DE now owns 55,566,463 shares of the Internet television network's stock valued at $5,209,912,000 after acquiring an additional 50,011,603 shares in the last quarter. Finally, Northern Trust Corp grew its holdings in shares of Netflix by 883.1% during the fourth quarter. Northern Trust Corp now owns 43,445,226 shares of the Internet television network's stock valued at $4,073,424,000 after buying an additional 39,026,066 shares during the last quarter. 80.93% of the stock is owned by institutional investors.

Analysts Set New Price Targets

NFLX has been the topic of a number of research reports. TD Cowen reduced their target price on shares of Netflix from $115.00 to $112.00 and set a "buy" rating on the stock in a research report on Wednesday, January 21st. Citigroup began coverage on Netflix in a report on Thursday. They set a "market perform" rating on the stock. DZ Bank reiterated a "buy" rating on shares of Netflix in a report on Friday, February 27th. Arete Research upgraded shares of Netflix from a "neutral" rating to a "buy" rating in a research report on Friday, February 27th. Finally, HSBC raised their target price on shares of Netflix from $106.00 to $114.00 and gave the company a "buy" rating in a research note on Friday, April 10th. Two research analysts have rated the stock with a Strong Buy rating, thirty-five have assigned a Buy rating and thirteen have assigned a Hold rating to the stock. According to data from MarketBeat.com, the company currently has a consensus rating of "Moderate Buy" and an average price target of $115.80.

Trending Headlines about Netflix

Here are the key news stories impacting Netflix this week:

• Positive Sentiment: Q1 results beat expectations — Netflix posted stronger-than-expected revenue (~$12.25B) and EPS (~$1.23), driven by membership/pricing and ad growth; these results reinforce improved profitability trends. Netflix (NFLX) Q1 Earnings and Revenues Surpass Estimates
• Positive Sentiment: One‑time windfall and pricing power boosted profits — Coverage highlights a roughly $2.8B breakup fee from Warner Bros and recent U.S. price hikes as major contributors to the profit beat and higher margins. That cash/earnings boost improves near‑term free cash flow. Netflix shatters profit expectations thanks to price increase and $2.8 billion breakup fee from Warner Bros.
• Positive Sentiment: Ad business and price hikes seen as durable tailwinds — Analysts and coverage note Netflix is monetizing better via ad growth and subscription price increases, potentially creating a multi‑billion dollar uplift over time. Why Netflix is in a win-win position as it continues to hike prices
• Neutral Sentiment: Broader market backdrop was constructive — The market rally heading into the report provided a favorable environment, but macro strength didn’t offset company‑specific reaction to guidance and leadership news. Market Upswell Continues, Full Week in the Green In-Sight
• Negative Sentiment: Soft near‑term guidance hurt sentiment — Netflix issued Q2 EPS guidance below consensus ( ~0.78 vs ~0.84 ) and a cautious near‑term outlook, prompting investors to sell despite the quarter’s beat. Investors Don't Like Netflix's Latest Outlook—Or the News that Reed Hastings Is Moving On
• Negative Sentiment: Chairman Reed Hastings to leave board — Hastings won’t stand for re‑election when his term ends in June; investors view the timing of the leadership change as an additional risk during a strategic pivot toward ads and content. Netflix co-founder and chair Reed Hastings to leave board
• Negative Sentiment: After‑hours selloff and de‑risking — Despite the beat, headlines about soft guidance and the board exit triggered an after‑hours decline as traders de‑risked into uncertain near‑term visibility. Coverage documents the selloff and market reaction. Netflix stock falls after company reports earnings, announces Reed Hastings will step down as chairman

Netflix Company Profile

Netflix, Inc NASDAQ: NFLX is a global entertainment company that provides subscription-based streaming of films, television series, documentaries and other video content. Founded in 1997 by Reed Hastings and Marc Randolph and headquartered in Los Gatos, California, the company began as a DVD-by-mail rental service and introduced streaming video in 2007. Netflix later expanded into producing and distributing original programming, beginning notable original hits in the 2010s, and now operates a content production and distribution ecosystem alongside its licensing activity.

The company's primary product is its on-demand streaming service, which can be accessed on a wide range of internet-connected devices and delivered through a suite of apps and web platforms.