NETFLIX Q1 REVENUE $12.25B AND EPS $1.23 BOTH BEAT GUIDANCE; WARNER BROS. TERMINATION FEE LIFTS NET INCOME Netflix reported first quarter 2026 revenue of $12.25 billion, up 16% year over year and ahead of the company’s own guidance of approximately $12.1 billion. Operating income rose 18% to $4.0 billion and operating margin expanded to 32.3% from 31.7% a year ago. Both metrics exceeded internal guidance. Diluted EPS came in at $1.23, beating the company’s $0.76 forecast and the $0.77 consensus estimate by 60%. Net income of $5.28 billion included a $2.8 billion termination fee from the collapsed Warner Bros. acquisition, recognized in interest and other income. Revenue growth was driven by membership growth, price increases, and accelerating advertising revenue. Japan became the largest contributor to member growth in Q1 following the World Baseball Classic live event, which drew 31.4 million viewers and set a Netflix Japan viewing record. A BTS live event drew 18.4 million global viewers, reaching the Top 10 in 80 countries. Free cash flow was $5.09 billion in Q1, more than double the $1.87 billion in Q4 2025. For Q2 2026, Netflix guided revenue of $12.574 billion, representing 13.5% year-over-year growth. Q2 operating margin guidance is 32.6%, below the 34.1% posted in Q2 2025, as content amortization is expected to be heaviest in the first half of the year. Full year 2026 guidance is unchanged: revenue of $50.7 to $51.7 billion, representing 12% to 14% growth, and operating margin of 31.5%. Advertising revenue is on track to reach $3 billion in 2026, roughly double year-over-year. Netflix confirmed it declined to raise its offer for Warner Bros. Discovery assets after that acquisition fell through. The company said it has “multiple ways to achieve its goals including producing, licensing, and partnering.”