Netflix Forecasts Slowest 2026 Sales Growth Since 2012 After Q1 Surge
NFLX•Netflix’s ad-supported plan grew to 250 million users, contributing to Q1 revenue growth of 16.2% and an operating margin of 32.3%, while total subscribers surpassed 325 million. Citigroup downgraded its rating to Hold as Netflix’s share price trails peers and management predicts 2026 sales will slow to 13.3%, the weakest rate since 2012.
1. Q1 Financial Performance
Netflix reported first-quarter revenue up 16.2% year-over-year, driven by higher average revenue per user and improved monetization, resulting in a 32.3% operating margin as cost control measures offset increased content spending.
2. Subscriber and Ad Plan Growth
Total streaming subscribers exceeded 325 million, with the ad-supported tier expanding to 250 million users; the shift to lower-priced, ad-funded offerings helped boost engagement and diversify revenue streams.
3. Citigroup Rating Change
On June 12, Citigroup shifted its analyst rating on Netflix to Hold from Market Perform, citing share price underperformance relative to competitors and concerns over slowing subscriber additions.
4. Future Outlook and Projections
Management expects 2026 sales growth to slow to 13.3%, marking the weakest annual increase since 2012, and analysts forecast $0.79 earnings per share on $12.57 billion revenue for the next quarterly report.
