Netflix Shares Plunge 9.7% on Weak Q2 Guidance; Reed Hastings to Exit Board
Netflix shares plunged 9.7% as Q2 revenue guidance of $12.57B and EPS forecast of $0.78 missed consensus estimates of $12.64B and $0.84. Co-founder Reed Hastings will leave the board in June after Q1 revenue of $12.25B and adjusted EPS of $1.23 beat expectations.
1. Q2 Guidance Miss
Netflix forecast Q2 revenue of $12.57B and EPS of $0.78, below Wall Street’s $12.64B and $0.84 estimates, triggering a 9.7% stock decline.
2. Q1 Performance Highlights
In Q1, revenue grew to $12.25B from $10.54B a year ago, topping the $12.17B consensus, while adjusted EPS of $1.23 exceeded the $0.76 estimate.
3. Leadership Change
Co-founder Reed Hastings, who led Netflix’s transformation from DVD rentals to streaming, will leave the board in June when his term ends.
4. Investor Reaction and Outlook
The guidance miss raised concerns over subscriber momentum and growth trajectory, prompting management to stress ongoing gains from pricing strategies and content investment.