Newsletter
Netflix beat street expectations in its first-quarter earnings, but the market wasn’t impressed.Shares fell 9% after the results, weighed down by a key management change.
By the numbers:
- Revenue: $12.25 billion for the quarter, slightly higher than expected
- Net Income: $5.28 billion (or $1.23 per share), nearly double last year’s profit
- Earnings per share: $1.23, well above estimates of 76 cents
- Operating income: Boosted by strong performance and a $2.8 billion breakup fee after the Warner Bros. Discovery deal fell through
Why the stock fell: two key factors drove the decline: leadership changes and a weak near-term outlook.
Netflix said co-founder Reed Hastings will step down as Chairman when his term ends in June, adding to investor uncertainty.
At the same time, concerns around higher costs and profitability weighed on sentiment.
Future plans: Netflix expects revenue to grow 13% next quarter, though higher content spending may pressure profits in the near term.
Looking ahead, it’s doubling down on ads (targeting $3 billion revenue), raising prices, and expanding its subscriber base to drive long-term growth.
