Netflix has reported a 16% year-on-year increase in revenue for Q1 2026, reaching $12.25 billion, supported by membership growth, pricing adjustments and rising advertising income. The company has recorded operating income of $3.96 billion, up 18% year-on-year, with operating margin improving to 32.3%.
The company has posted diluted earnings per share of $1.23, compared to $0.66 in the same period last year, driven by higher operating income and a one-time $2.8 billion termination fee linked to a Warner Bros. transaction.
Netflix has maintained its full-year 2026 revenue guidance between $50.7 billion and $51.7 billion, projecting 12–14% growth, while continuing to target an operating margin of 31.5%.
Advertising has remained a key growth lever, with the company expecting its ad revenue to reach approximately $3 billion in 2026, nearly doubling year-on-year. The ad-supported plan has accounted for over 60% of new sign-ups in supported markets, while the advertiser base has grown to over 4,000 clients, up 70% year-on-year.
On the cost front, sales and marketing spend has stood at $842 million for the quarter, lower than the previous quarter but higher than the year-ago period, reflecting ongoing investments in subscriber acquisition and brand visibility.
The company has also continued to expand its product and content ecosystem, including live programming, video podcasts, and gaming, alongside investments in AI-led personalisation and content tools. It has acquired InterPositive to enhance generative AI capabilities for creators.
Regionally, revenue growth has remained strong across markets, with Asia-Pacific growing 20% year-on-year and Latin America 19%, while EMEA and UCAN have reported 17% and 14% growth respectively.
For Q2 2026, Netflix has forecast revenue of $12.57 billion, indicating 13% year-on-year growth, with operating margin expected at 32.6%.
The company has generated $5.3 billion in operating cash flow and $5.1 billion in free cash flow during the quarter, supported partly by the Warner Bros.-related termination fee.
Reed Hastings, Co-founder and Chairman, Netflix, said: “Netflix changed my life in so many ways, and my all-time favorite memory was January 2016, when we enabled nearly the entire planet to enjoy our service. My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come. A special thanks to Greg and Ted, whose commitment to Netflix’s greatness is so strong that I can now focus on new things.”
Ted Sarandos, Co-CEO, Netflix, said: “Reed has been a singular source of inspiration for me, personally and professionally, since we met in 1999. I’ve had the privilege of working for, and alongside, a true history maker and I look forward to marveling at all he will do next. He has modeled for Greg and me a selfless, disciplined leadership style that will continue to shape how we lead Netflix in the exciting times ahead.”
Greg Peters, Co-CEO, Netflix, said: “Reed will always be Netflix’s founder and biggest champion—he is a part of our DNA. His vision, entrepreneurship, and steadfast commitment to our values have shaped every stage of our journey and continue to shape how Ted and I lead Netflix today.”
