Netflix bested expectations in Q1 with $12.25 billion in revenue
Netflix bested expectations in Q1 with $12.25 billion in revenue
Co-CEO Ted Sarandos said that losing out on WBD has built the company’s musicle for future M&A.
You never know what kind of data you’re going to get from Netflix in an earnings report these days. The streamer no longer regularly provides subscriber updates, yet in its report from the fourth quarter of 2025, it decided to reveal that it had grown to 325 million paid subscribers. In its first disclosure since that report, the world’s largest stream revealed another surprise, as it bested projections to hit $12.25 billion in revenue during the first quarter of 2026.
Key Details:
- With a B: During the first quarter of 2026, Netflix hit $12.25 billion in revenue.
- Still on pace: Netflix continues to forecast $3 billion in ad revenue in 2026.
- Say goodbye: Co-founder Reed Hastings will leave Netflix’s board of directors in June.
In its first quarter, Netflix’s $12.25 billion in revenue marked an increase of 16.2% over the year-ago quarter. Net income for the quarter was $5.283 billion, more than that of the previous two quarters combined.
Revenue from subscribers in the United States and Canada dipped slightly in Q1 to come in at $5.245 billion, down from $5.339 billion in the fourth quarter. Europe, the Middle East, and Africa generated 17% more revenue YOY, rising to $3.998 billion. Income from the Asia-Pacific region rose by 20% to $1.509 billion, while Latin America saw a 19% over the corresponding quarter in 2025 to hit $1.497 billion.
The company gave little insight into the quarter beyond the financial disclosures, but did note that its “internal quality engagement metric” achieved a record high during the first three months of the year. Netflix also reported that its recent price increases have “gone well” and that advertising revenue is still on pace to hit $3 billion in 2026, doubling that of 2025.
The first quarter of 2025 was dominated by Netflix’s continued pursuit of Warner Bros. Discovery, which it had a lucrative deal in place to purchase. But in late February, Netflix bowed out of the running for WBD, after a new and improved offer from Paramount Skydance outdistanced what the streamer was willing to pay for the legacy studio.
While the attempt did not prove to be fruitful, co-CEO Ted Sarandos said that it was a valuable learning experience for the company:
“We’ve learned so much about deal execution, about early integration. We’re really proud of the teams that did all that work. We were proud to win the bid. We are confident in our ability to get to the finish line with regulators for the approvals that we needed. But mostly, we really built our M&A muscle. And the most important benefit of this entire exercise, though, was that we tested our investment discipline. And when the cost of this deal grew beyond the net value to our business and to our shareholders, we were willing to put emotion and ego aside, and walk away.”
Additionally, Netflix aired its first MLB game in history in the first quarter of the year. The streamer drew a large, young audience for the Opening Night contest, and it will also host the Home Run Derby, as well as the Field of Dreams game this year. Netflix also touted the fact that it aired its first-ever regional sporting event during Q1, as it broadcast the World Baseball Classic in Japan.
It was also disclosed during the earnings call that Netflix co-founder Reed Hastings would be stepping down from his position on the company’s board of directors following the end of his term in June. This comes more than three years after he left his co-CEO position.
Netflix
Netflix is a leading subscription-based video streaming service that offers on-demand access to an extensive library of over 3,000 movies, 2,000+ TV shows, and a growing collection of acclaimed Netflix originals. Renowned for producing groundbreaking content, Netflix has become a cultural powerhouse with hit originals like “Stranger Things,” “Wednesday,” “Squid Game,” “The Crown,” “Tiger King,” “Bridgerton,” “The Witcher,” and “Black Mirror.”