Reed Hastings founded Netflix 29 years ago with an idea as simple as it was revolutionary: charge a fixed fee in exchange for access to content on demand and without interruptions, in a digital version of the video store by mail in which the company took its first steps. This Thursday, as the company posted solid quarterly results that still disappointed Wall Street, it was announced that Hastings will step down from the board of directors in June. The man who built Netflix is leaving now that the platform is no longer what he envisioned.
The results. The results for the first quarter of 2026 are, in absolute terms, notables. They reached 12.25 billion dollars, 16% more than in the same period of the previous year, meeting what the company itself had projected and slightly exceeding the average expectations of analysts. Net profit grew 82% to $5.23 billion. It is a spectacular percentage, yes, but that earnings per share of $1.23 includes the $2.8 billion break-up fee Frustrated deal with Warner Bros. Discoverywhich inflates the accounting result. Without it, the number would have been more modest. And that’s why shares fell 9% on Wall Street.
Fall in the stock market. The main reason for this stock market crash was not the data for the quarter, but the outlook for the second. Netflix projects 13% growth in revenue for Q2, to about $12.6 billion, when the Wall Street consensus was closer to $13.1 billion. The difference is small in relative terms, but enough to remind us that investors have been accustomed for years to Netflix far exceeding its forecasts.
Goodbye Hastings… The company has also announced that Reed Hastings, co-founder and until now president of the councilwill not stand for reelection when his term expires at the shareholders meeting on June 4, 2026. This ends 29 years with the company which he himself co-founded. Hastings had already given a step back in January 2023when he left the co-CEO position in the hands of Ted Sarandos and Greg Peters.
His definitive departure from the board, the company explained, responds to his desire to focus on philanthropy and other projects. During the call to analysts after the presentation of results, Sarandos had to respond to whether Hastings’ departure had any relationship with the failure of the operation with Warner Bros. Discovery. Sarandos stated that “I’m sorry to anyone who seeks palace intrigue. Reed was a great defender of that agreement.”
…hello to the announcements. Hastings was for years one of the most visible skeptics within the company regarding the use of streaming advertising. In 2022, when Netflix first lost subscribersdeclared to be “against the complexity of advertisements.” Four years later, the advertising business has become one of the structural pillars of the company. The company works with more than 4,000 advertisers, 70% more than the previous year, and the advertising-supported plan already accounts for more than 60% of new registrations in the 12 countries where it is available, according to data from Netflix itself.
The projection of advertising revenue for 2026 is 3,000 million dollars, double the 1.5 billion generated in 2025. It is paradoxical that the platform that has been seen as an evolutionary step of traditional television, without its inconveniences (among which, without a doubt, is advertising), now competes directly with YouTube and linear television for brand advertisements. What’s more: Netflix has migrated its advertising technology to its own platform, leaving behind dependence on Microsoft, and programmatic purchasing It is already close to 50% of its advertising business not tied to events.
The paradox. That is, everything in these results points to a great paradox. The company itself recognizes which represents less than 5% of the share global television, but projected annual revenues of between $50.7 billion and $51.7 billion place it among the largest media companies on the planet. And meanwhile, its shares fall 9%. There is an explanation for all of this.
For years, Netflix was a company of exponential growth, the type of asset that technology funds love: skyrocketing subscriber metrics, unstoppable geographic expansion, its own content that accumulated prestige and audience… Now it is something else: the mainstreamprofitable and predictable, with several monetization levers (subscription, advertising, live sports, gaming) and a business model that is no longer surprising, but widely imitated. A solid company, with a dominant position and prospects for growing profitability, but at a calm pace, in the medium term. It is certainly not the Netflix that Hastings built.
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