Who needs Warner Bros.? Netflix reported better-than-expected revenue in the first quarter (2026) thanks to surprisingly strong membership growth, especially in Japan, where the World Baseball Classic was a huge success. Better ad sales and higher subscription prices also began. We did not get an updated subscriber total on Thursday.
What we got was a set of financial data that exceeded expectations, both internal and external. For the March quarter, Netflix reported diluted earnings of $1.23 per share on revenue of $12.250 billion, up 16 percent from a year earlier. Net income amounted to $5.283 billion. Operating income was approximately $4 billion (+18 percent). The company previously expected its revenue for the first quarter of 2016 to be $12.157 billion, and forecast earnings of $3.264 billion, which would have been diluted to 76 cents per share.
The big bottom line win was largely credited to the $2.8 billion severance fee Netflix received no Get Warner Bros. (And paid for by Paramount). The result is cash flow fans salivating over.
Sometimes when you lose, you really win. “Warner Bros. would have been a good accelerator for our strategy, but only at the right price,” the shareholder letter said.
After the bell and subsequent message, Netflix (NFLX) shares fell about 10 percent. The decline was not because of what happened, but because of what happened It will happen. Netflix expects its Q2 operating margin to decline year over year from 34.1 percent to 32.6 percent.
The shareholder letter also revealed that Netflix co-founder Reed Hastings will leave its board to focus on philanthropic efforts.
“Netflix has changed my life in so many ways, and my favorite memory ever was January 2016, when we enabled almost the entire planet to enjoy our services,” Hastings wrote. “My true contribution to Netflix wasn’t a single decision; it was to focus on member happiness, build a culture that others can inherit and improve, and build a company that can be loved by members and be a huge success for generations to come. Special thanks to Greg and Ted, whose commitment to Netflix greatness has been so strong that I can now focus on new things.”
At the end of 2025, the number of paid global Netflix subscribers exceeded 325 million. Although the company announced some time ago that it would no longer provide quarterly updates on the subs, executives said they would provide updates to investors (and thus the public) based on meaningful criteria. Instead, Netflix is now focusing on new KPIs (Key Performance Indicators), revenue and income.
Netflix released Peaky Blinders Film in the first quarter, as well as Alan Ritchson War machine. The best series from the first three months of 2026 are included Bridgerton season four, Strange things the end, His and hers and one piece Season two, to pick a few.
In the most recent quarter, the company reported earnings per share of 56 cents on revenue of $12.157 billion. At the time, Netflix was in the process of purchasing Warner Bros. For 83 billion dollars. What a difference a quarter makes: Netflix is out of the lottery and Paramount Skydance is in with a bang, with David Ellison paying about $111 billion for the entire Warner Bros. franchise. Discovery.
