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Netflix Co-Founder Reed Hastings to Leave Board in June
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April 17, 2026
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3:10Now PlayingBloomberg Surveillance hosts Paul Sweeney and Tom Keene discuss the work of Netflix Co-Founder Reed Hastings as he announces his exit from the company board in June.
Netflix Inc. shares tumbled the most in four years after the company gave a forecast for the second quarter that fell short of analysts’ expectations, underwhelming Wall Street just months after it lost out on a bid for Warner Bros. Discovery Inc.
The streaming pioneer also announced that chairman and co-founder Reed Hastings is stepping down after 29 years at the company to pursue philanthropy and personal interests.
In the current quarter, Netflix forecast earnings per share of 78 cents, less than the 84 cents predicted by Wall Street. Revenue projections for the second quarter were also tepid. Netflix said revenue would be $12.57 billion in the three months ending in June, compared with estimates of $12.64 billion, according to data compiled by Bloomberg.
The shares sank as much as 12%, as trading got underway in New York Friday morning. It was the biggest intraday decline since April 2022. Before the results, the shares had gained 27% since Netflix abandoned its pursuit of Warner Bros. in late February.
“In its first time reporting since the collapse of the Warner Bros Discovery acquisition, Netflix delivered a lackluster set of results,” said Ben Barringer, head of technology research at Quilter Cheviot. “With a double whammy of mediocre results and the departure of a key figure, it is not surprising investors are trimming positions.” After the collapse of the Warner Bros. deal, “this isn’t exactly what we would expect from Netflix, nor what we have become accustomed to.”
Netflix walked away from a contentious battle for control of Warner Bros.’ streaming and studio business in February. The company’s shares had suffered during the months-long tussle with Paramount Skydance Corp. as investors were concerned about the amount of debt Netflix would shoulder under a potential deal. Wall Street also fretted that it was a sign the company had run out of ideas. In a letter to shareholders, Co-Chief Executive Officers Ted Sarandos and Greg Peters said Warner Bros. “would have been a nice accelerant for our strategy, but only at the right price.”
Paramount agreed to acquire Warner Bros. for $110 billion, and the deal is now undergoing regulatory scrutiny in the US and Europe and faces vehement opposition from Hollywood.
On a call with investors, Sarandos said the bidding process taught them “so much about deal execution.” While mergers and acquisitions remain “a tool to help achieve our goals,” he said pulling out of the Warner Bros. fight showed that “we’ll remain very disciplined as to how we approach it.”
Now Wall Street is looking for signs Netflix can keep subscribers engaged. Management said customer retention had improved in every region during the first quarter. The company raised its subscription prices in March, boosting its standard plan without ads by $2 to $20 a month. Revenue rose 16% in the first three months of the year to $12.3 billion, compared with estimates for $12.2 billion. Earnings per share for the quarter were $1.23 compared with estimates of 76 cents. That was due in part to a $2.8 billion breakup fee paid to Netflix by Paramount.
“These are great numbers. What people wanted was even better,” Ross Gerber, CEO of Gerber Kawasaki Wealth and Investment Management, told Bloomberg TV. “They didn’t up their guidance for the year, which I think people were hoping for.”
Sarandos and Peters sought to reassure investors that they remain confident and have a plan for the future, outlining three key priorities: delivering more quality programming, implementing new technologies and generating more money from members. The company plans to boost spending on programming this year, which is a big reason its earnings for the current quarter may disappoint.
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