Netflix (NFLX) stock sank over 9% late Thursday after the king of streaming missed Wall Street’s consensus earnings estimate for the first quarter.
Netflix issued GAAP EPS of $1.23, which missed the consensus by $0.11. NFLX sank from its close at $107.88 to momentarily below $98.00.
Revenue was a bright spot. The company printed sales of $12.25 billion, up 16% YoY. That figure beat the consensus by $80 million.
However, Netflix lowered its outlook for the second quarter to below consensus. Executives now estimate Q2 sales of $12.57 billion versus analyst consensus of $12.63 billion. Likewise, they forecast Q2 GAAP EPS $0.78 versus the prior consensus of $0.84.
“We expect Q2 to have the highest [YoY] content amortization growth rate in 2026, before decelerating to mid-to-high single digit growth in the second half of the year,” Netflix said in a statement. “As a result, we forecast Q2 operating margin of 32.6% compared with 34.1% in the year ago quarter. We expect year-over-year operating margin growth in Q3 and Q4 in order to deliver our 2026 margin target.”
Q1 saw an operating margin of 32.3%, which was higher than the year earlier mark of 31.7%. For the
“Our full year 2026 guidance is unchanged: we forecast 2026 revenue of $50.7 billion-$51.7 billion, which represents 12%-14% growth (11%-13% F/X neutral), driven by continued healthy membership growth, pricing and a projected rough doubling of our ads revenue,” Netflix said in their press release.
