The 65-year-old cofounder and former CEO of the world’s largest streaming service introduced on Thursday that he received’t stand for reelection to the board on the firm’s annual shareholder assembly in June, ending a 29-year run on the firm he created in 1997. In an announcement included within the first quarter investor letter, the billionaire stated he’s leaving to give attention to philanthropy “and other pursuits.” He gave shoutouts to co-CEOs Greg Peters and Ted Sarandos, who took full management of Hastings’s government function in January 2023.
“A special thanks to Greg and Ted, whose commitment to Netflix’s greatness is so strong that I can now focus on new things,” stated Hastings.
Whereas Netflix has proven its enterprise can thrive with out Hastings in an working function, the founder’s full separation from the corporate is one thing of an anomaly within the tech world the place founders sometimes stay on the board of administrators for years. Nor did the timing of Hastings’s exit—coming shortly after Netflix’s failed try to accumulate Warner Bros.—go unnoticed.
So is Hastings’s departure associated to Netflix’s tried buy of the Hollywood film studio, an analyst requested throughout Netflix’s earnings name on Thursday?
Completely not, stated co-CEO Sarandos.
“Sorry for anyone who was looking for some palace intrigue here, not so,” Sarandos stated, in what was Netflix’s first earnings name because it walked away from the deal in February.
Netflix proposed the $27.75 per-share deal for Warner Bros. in January. Warner Bros. accepted, after which in February 2026 Warner Bros. advised Netflix that David Ellison’s Paramount Skydance had submitted a greater proposal. Paramount Skydance paid Netflix a $2.8 billion termination charge within the deal.
The analyst who requested the query Thursday famous that Hastings was traditionally against giant acquisitions, however Sarandos stated the Netflix founder was absolutely on board with the plan to buy Warner Bros. Discovery’s studio enterprise and streamer HBO Max for an enterprise worth of $82.7 billion.
“Reed was a big champion for that deal. He championed it with the board; the board unanimously supported the deal, so … that absolutely had nothing to do with it,” Sarandos stated.
Shares of Netflix plunged as a lot as 9% in after-hours buying and selling on Thursday, as the corporate beat first-quarter monetary targets however forecast second-quarter income and earnings beneath Wall Avenue expectations, in accordance with Bloomberg.
‘We did not lose focus’
Sarandos stated the corporate is wanting forward and never backward.
“At the risk of being a broken record, I just want to remind you that we said this from the beginning, that the WB deal was a nice to have, not a need to have,” Sarandos stated throughout Netflix’s name with analysts. “Our biggest risk was losing focus on our core business while we were working on the transaction, and as you can see from our Q1 results, we did not lose focus.”
Netflix reported internet revenue of $5.3 billion for the primary quarter of 2026, up about 82.8% from $2.9 billion a 12 months in the past. Income rose 16.2% to $12.25 billion. The $2.8 billion from Paramount Skydance boosted the streamer’s free money move to $5.1 billion, prompting Netflix to boost its full-year 2026 free money move forecast to $12.5 billion, up from $11 billion.
Sarandos stated the corporate strengthened its “M&A muscle” in designing the bid and dealing with regulators on approvals. One of many advantages of the train was that executives examined their “investment discipline, and when the cost of this deal grew beyond the net value to our business and to our shareholders, we were willing to put emotion and ego aside and walk away.”
Netflix additionally detailed three strategic priorities in its investor letter, mapping out its playbook now that the Warner Bros. deal is off the desk. The corporate is specializing in extra leisure, leveraging know-how, and enhancing monetization.
Netflix stated it might broaden into video podcasts and dwell occasions, together with the World Baseball Basic in Japan, which drove its single largest day of Netflix sign-ups within the nation. It additionally plans to leverage know-how to enhance its service, flagging its March acquisition of Hollywood actor and director Ben Affleck’s AI-powered moviemaking device, InterPositive.
Netflix can also be revamping cellular viewing with a vertical video discovery feed launch deliberate for the top of April. Its ad-supported value tier represented 60% of all sign-ups in international locations the place it’s an possibility, and Netflix stated it expects $3 billion in advert income this 12 months, double its 2025 figures.
Peters reaffirmed the corporate’s monetary objectives of income development of 12% to 14% and working margin of 31.5%. He stated Netflix’s viewers is approaching 1 billion individuals, which Peters stated will likely be “an exciting milestone to strive for” that leaves it with “plenty of room to grow.” He stated Netflix’s market penetration is underneath 45%.
