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Netflix First-Quarter Results Rise, Second-Quarter Outlook Misses Views

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Netflix's (NFLX) first-quarter results rose year-on-year, though the streaming giant's second-quarter outlook fell short of Wall Street's estimates.

Per-share earnings climbed to $1.23 from $0.66 a year earlier. Revenue increased 16% to $12.25 billion, above the consensus on FactSet of $12.18 billion.

Stronger-than-projected membership growth, higher pricing and increased ad revenue helped boost the top-line, Netflix said in a letter to shareholders.

Wedbush Securities expected the streamer to post a revenue beat, saying the latest round of price increases could buoy Netflix's profitability this year.

Last month, the company raised prices on all its plans in the US, including bumping its ad-supported standard tier to $8.99 per month.

Netflix projects second-quarter revenue rising 13.5% year-over-year to $12.57 billion, lower than analysts' $12.64 billion estimate. EPS is pegged at $0.78, versus the consensus view of $0.84.

Netflix sees operating margin falling to 32.6% in the ongoing three-month period from 34.1% in the year ago quarter.

Shares were down 8% in after-hours trading.

"As we noted in last quarter's letter, growth in content amortization will be first-half weighted due to the timing of title launches," the company said. "We expect (second-quarter) to have the highest year-over-year content amortization growth rate in 2026, before decelerating to mid- to high-single-digit growth in the second half of the year."

For 2026, Netflix continues to expect revenue of $50.7 billion to $51.7 billion, reflecting 12% to 14% of annual growth. The consensus estimate is for $51.37 billion.

Last week, Wedbush raised its price target on Netflix to $118 from $115, citing expected revenue growth in 2026 amid a significant boost from advertising.

"Netflix should continue to gain incrementally from its ad business by expanding partnerships, improving targeting, leveraging (artificial intelligence), and adding more live content," Wedbush analyst Alicia Reese wrote in the note on Friday.

Netflix said its co-founder and chairman, Reed Hastings, will not stand for re-election to the board when his current term expires in June.

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