Netflix, Inc. 8-K
PositiveEarningsGuidance raised
Warner Bros. termination fee lifts earnings and FY cash-flow outlook; Reed Hastings will leave the board in June.
Filed 2026-04-16 16:01 ET
- 2.02 Results of Operations
- 5.02 Officer/director change
- 9.01 Financial Statements and Exhibits
Summary
Q1 2026 results with Q2 and FY2026 guidance; Reed Hastings will leave the board at the June annual meeting. Revenue grew 16% Y/Y and operating income 18%, both ahead of guidance on slightly higher subscription revenue. FY2026 revenue and operating-margin guidance was reaffirmed, while free-cash-flow guidance rose, primarily reflecting the after-tax impact of the Warner Bros. termination fee. Hastings will remain a director and Chairman until the meeting; he cited a focus on philanthropy and other pursuits.
Key Figures
| Metric | Q1 2026 |
|---|---|
| Revenue | $12.2B, +16.2% Y/Y |
| Operating income | $3.96B, +18% Y/Y |
| Operating margin | 32.3%, vs 31.7% |
| Net income | $5.28B, +82.8% Y/Y |
| Diluted EPS | $1.23, +86% Y/Y |
| Operating cash flow | $5.29B, +89.7% Y/Y |
| Free cash flow (non-GAAP) | $5.09B, +91.4% Y/Y |
- Revenue growth was driven by membership growth, higher pricing and increased advertising revenue; foreign-exchange-neutral growth was 14%. Net income included a $2.8B Warner Bros.-related termination fee, recognized in interest and other income.
- Cash and cash equivalents were $12.3B and gross debt was $14.4B at quarter-end; non-GAAP net debt was $2.12B. The termination-fee receipt contributed to the increase in operating cash flow and free cash flow.
- Netflix repurchased 13.5M shares for $1.27B; $6.8B remained under its authorization. Diluted weighted-average shares were 4.30B, down from 4.37B Y/Y.
Guidance
| Metric | Period | Guidance | Prior | Direction |
|---|---|---|---|---|
| Revenue (GAAP) | Q2 2026 | $12.574B; +13.5% Y/Y (12% F/X-neutral) | — | — |
| Operating income (GAAP) | Q2 2026 | $4.105B | — | — |
| Operating margin (GAAP) | Q2 2026 | 32.6% | — | — |
| Net income (GAAP) | Q2 2026 | $3.327B | — | — |
| Diluted EPS (GAAP) | Q2 2026 | $0.78 | — | — |
| Revenue (GAAP) | FY2026 | $50.7B–$51.7B; 12%–14% growth (11%–13% F/X-neutral) | $50.7B–$51.7B | Reaffirmed |
| Operating margin (GAAP) | FY2026 | 31.5% | 31.5% | Reaffirmed |
| Free cash flow (non-GAAP) | FY2026 | ≈$12.5B | $11B | Raised |
| Advertising revenue | FY2026 | ≈$3B; 2x 2025 revenue | — | Reaffirmed |
| Cash content spend to amortization ratio | FY2026 | ≈1.1x | — | Reaffirmed |
Netflix expects Q2 content-amortization growth to be its highest Y/Y rate of 2026, then deceleration to mid-to-high single digits in H2; it expects Q3 and Q4 operating-margin growth to deliver the FY target.
Investor Takeaways
- Watch Q2 revenue and margin against guidance, then whether Q3 and Q4 margin growth supports the 31.5% FY2026 target.
- Track whether free cash flow and advertising revenue develop in line with the FY2026 outlook.
The summary is written by an AI model reading the filing.
Model 005 · prompt 8bef31e277 · 2026-10-14 16:47:37Z