Netflix $NFLX fell 9% in extended trading after a Q1 report that beat the revenue line but left investors focused on unchanged full-year guidance, heavier first-half content costs, and a board transition. The company reported Q1 revenue of $12.25B, up 16% from $10.54B a year earlier and above the $12.18B LSEG consensus cited by CNBC.

The primary filing was Netflix's Q1 2026 shareholder letter. It showed operating income of $3.957B, an operating margin of 32.3%, net income of $5.283B, and diluted EPS of $1.23. Netflix said the EPS figure was helped by a $2.8B termination fee tied to the failed Warner Bros. Discovery transaction, making the reported EPS line less comparable with sell-side estimates.

Metric	Q1 2026	Context
Revenue	$12.25B	16.2% year over year
Operating income	$3.957B	18% year over year
Operating margin	32.3%	31.7% in Q1 2025
Diluted EPS	$1.23	Includes WBD termination fee effect

Management kept its 2026 revenue outlook at $50.7B-$51.7B and its operating margin target at 31.5%. For Q2, Netflix forecast revenue of $12.574B, operating income of $4.105B, operating margin of 32.6%, and diluted EPS of $0.78. The letter also said advertising revenue remains on track to reach $3B in 2026, roughly double year over year.

The governance change added a second catalyst. Reed Hastings told the company he will not stand for re-election when his board term expires at the June annual meeting. What to watch next is whether Q2 content amortization, ad-tier growth, and price-change churn keep the 31.5% margin target intact after the after-hours 9% reset.

Not investment advice. Verify all figures with primary sources before acting.

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Netflix $NFLX falls 9% after Q1 revenue hits $12.25B; Hastings exits