Netflix Stocks Plunge 9% Despite Surpassing Q1 Earnings Predictions
Netflix Inc. shares experienced a 9% drop in after-hours trading on April 16, 2026. This occurred despite the company exceeding Wall Street’s first-quarter earnings expectations. Investors were swayed by the less-than-ideal second-quarter guidance and the announcement of co-founder Reed Hastings’ departure from the board.
The streaming behemoth reported a Q1 revenue of $12.25 billion, outdoing the $12.18 billion analyst consensus. This represents a 16% increase year-over-year. However, the company’s second-quarter projections did not meet Street expectations, forecasting a revenue growth of 13% (12% foreign exchange neutral). This triggered a selloff.
Netflix maintained its full-year 2026 revenue guidance of $50.7 billion to $51.7 billion, indicating a 12-14% growth. The company also confirmed its target operating margin of 31.5%. It reiterated its ambition to double advertising revenue to approximately $3 billion in 2026, a significant leap from $1.5 billion in 2025. The ad-supported tier now accounts for over 60% of all new sign-ups in countries where it’s available.
Adding to investor concerns was the announcement that Reed Hastings, Netflix’s co-founder and current chairman, will step down from the board in June when his term expires. Hastings, who served as CEO until 2023 before transitioning to executive chairman, leaves behind a significant legacy at the streaming pioneer.
Source: CNBC