Netflix reported first-quarter revenue growth of 16% to $12.3bn ($12.2bn expected), driven by membership growth, price hikes, and increased ad revenue. Operating profit rose 18% to $4.0bn, with margins up from 31.7% to 32.3%.
Free cash flow rose from $2.7bn to $5.1bn, boosted in part by a $2.8bn Warner Bros-related termination fee, and net debt was at $2.1bn at the end of the period.
For 2026, second-quarter revenue is expected to grow 13% (13.4% expected), with operating margins of 32.6% (34.5% expected). For the full year, revenue growth of 12-14% was unchanged, alongside margin guidance of around 31.5%.
Given Netflix declined to raise its offer for Warner Bros. it has resumed share buybacks. During the quarter 13.5mn shares were repurchased for $1.3bn, leaving $6.8bn remaining on the existing programme.
The shares fell 9.9% in pre-market trading.
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Netflix key facts
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This article is original Hargreaves Lansdown content, published by Hargreaves Lansdown. It was correct as at the date of publication, and our views may have changed since then. Unless otherwise stated estimates, including prospective yields, are a consensus of analyst forecasts provided by LSEG. These estimates are not a reliable indicator of future performance. Yields are variable and not guaranteed. Investments rise and fall in value so investors could make a loss.
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