April 7, 2026, Poland: In this photo illustration, a Netflix logo is seen displayed on a smartphone with Netflix website in the background. Poland
Netflix reported a net profit of 5.28 billion dollars (4.1 billion francs) in the first quarter.
Reed Hastings, co-founder of the streaming giant, is leaving the company. He created the company in 1997 when it was just a DVD rental service by mail.
Netflix announced on Thursday the upcoming departure of its iconic founder Reed Hastings, who transformed the company from a DVD rental service by mail into a global streaming giant, alongside financial results that led to a drop in its stock market performance.
Currently serving as chairman of the board without an executive role, 65-year-old Hastings has decided not to seek reappointment as a director, thereby confirming his departure from the group after the June general meeting.
“Netflix changed my life in many ways,” wrote Reed Hastings in a letter accompanying the publication of the results, after the close on Wall Street.
“My favorite memory remains January 2016 when we allowed nearly the entire planet to enjoy our service.”
In 1997, Reed Hastings co-founded Netflix with Marc Randolph, which was then just a DVD rental service by mail, an innovative model breaking away from traditional physical stores. Ten years later, the group launched its streaming platform, which has since become the benchmark for on-demand video with over 325 million subscribers.
Marc RandolphImage: www.imago-images.de
The company gradually expanded, launching its service in France in 2014 and establishing itself as a cinema and television giant with successful original series and films like “The Crown” and “KPop Demon Hunters,” the latter winning the best animated film at the recent Oscars.
The Failed Acquisition of Warner Bros Discovery
Reed Hastings, who said he wants to focus on philanthropic activities among other things, had no operational role after stepping down as co-CEO of Netflix in January 2023. The following year, the company discontinued its DVD rental service after shipping over five billion DVDs in 25 years.
“The first time I met Reed in 1999, he told me he was building a company that would last long after his departure,” said co-CEO Ted Sarandos.
Ted SarandosKeystone
These results were poorly received: Netflix’s stock plunged by over 9.6% in electronic trading following the Wall Street close. The Los Gatos (California) group reported a net profit of 5.28 billion dollars (4.1 billion francs) in the first quarter, well above the 3.29 billion projected by analysts, according to a FactSet consensus.
Excluding this exceptional element, the results are significantly below estimates. As for revenue, it is only slightly higher than the analyst consensus, at 12.25 billion dollars.
Diversifying Revenue Sources
According to Eric Clark, portfolio manager at Accuvest Global Advisors, the stock’s decline is primarily linked to its 40% increase since Netflix withdrew from the WBD deal. “The results needed to be absolutely perfect to fuel a further rise in the stock price, which was not the case,” he said.
However, he believes that the group remains well positioned to surpass the symbolic threshold of one trillion dollars in market capitalization in the long term, more than double its current valuation of 452 billion.
During the conference call, Ted Sarandos reiterated that the acquisition of WBD was “a great opportunity, but not a mandatory step” in Netflix’s strategy. He added that the “N-red” company had not given up on acquisitions but intended to act prudently and with financial discipline.
For Ross Benes, an analyst at Emarketer, Netflix is slow to fully diversify its revenue sources and still heavily depends on subscriptions. The group is ramping up efforts in advertising and expects 3 billion dollars in revenue from this area in 2026, double the total from the previous year.
Another aspect of the group’s strategy, Ted Sarandos reaffirmed the importance of live programming, especially sporting events, for Netflix. Another growth area, according to him, is film podcasts, whose offerings are gradually expanding on the platform.
