Who needs Warner Bros.? Netflix reported better-than-anticipated first quarter (2026) revenue thanks to surprisingly strong member growth, particularly in Japan. Better ad sales and higher subscription prices also kicked in. We did not actually get an updated subscriber total on Thursday.
What we did get was a set of financials that looked pretty good. For the first quarter of 2026, Netflix posted diluted earnings of $1.23 per share on $12.250 billion in revenue, up 16 percent from the prior year. Net income was $5.283 billion; operating income was nearly $4 billion. The company previously forecast Q1 2016 revenue of $12.157 billion and $3.264 billion in profit (diluted to 76 cents per share).
The big beat at the bottom line was thanks in large part to a $2.8 billion termination fee Netflix received for not getting Warner Bros. Netflix also saw positive contributions from higher pricing and ad sales in the quarter.
At the end of 2025, Netflix surpassed 325 million global paid subscribers. Though the company announced some time ago it would no longer be giving quarter-by-quarter updates on subs, executives did say they would update investors (and thus, the public) at meaningful benchmarks. Netflix instead now focuses on its new KPIs (key performance indicators), revenue and income.
Netflix released its Peaky Blinders movie in the first quarter, as well as Alan Ritchson’s War Machine. Top series from the first three months of 2026 included Bridgerton season four, the Stranger Things finale, His & Hers and One Piece season two, to cherrypick a few.
Last quarter, the company recorded EPS of 56 cents on $12.157 billion in revenue. At the time, Netflix was in the process of buying Warner Bros. for $83 billion. What a difference a quarter makes: Netflix is out of the sweepstakes and Paramount Skydance is in. David Ellison is paying about $110 billion for the entirety of Warner Bros. Discovery. Don’t feel too badly for Netflix — the streamer got a $2.8 billion breakup fee, covered by Paramount, for getting kicked to the curb.
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