Netflix (NASDAQ: NFLX) reported Q1 FY2026 results on April 16, 2026. Drawing on BOTH the earnings release (shareholder letter) AND the earnings call: (a) what revenue did Netflix forecast for Q2 2026, and what Q2 2026 operating margin did it guide to versus the year-ago quarter? and (b) on the call, how did the CFO explain the M&A-related costs embedded in the 2026 guidance and their effect on operating margin?

ready: true

# NFLX — Earnings Call Trajectory

**2 quarters returned, 2 with transcript.**

## Coverage

## Guidance Trajectory
*Grouped by metric. Each row shows the value given on that call with any delta-vs-prior flag from the extractor.*

**operating margin expansion**:
- 2026-01-20: 2 percentage points → FY2026
- 2026-01-20: 2.5 points → FY2026
**revenue_growth**:
- 2026-04-16: 12% to 14% → FY2026 [new] wide_range
**operating_margin**:
- 2026-04-16: 31.5% → FY2026 [maintained] point
**advertising_business_revenue**:
- 2026-04-16: approximately USD 3 billion → FY2026 [new] point
**advertising_revenue**:
- 2026-04-16: $3 billion → FY2026 [maintained] point
**revenue**:
- 2026-01-20: $51 billion → FY2026
**ad revenue**:
- 2026-01-20: roughly double again in 2026 to about $3 billion → FY2026
**content amortization**:
- 2026-01-20: increase roughly 10% year-over-year → FY2026
**operating margin**:
- 2026-01-20: 31.5% → FY2026
**CPM**:
- 2026-01-20: similar CPMs → FY2026
*(+3 other metric(s) — drill via get_filing_index)*

## Macro Responses by Quarter
**2026-04-16**:
- fx (neutral)

# NETFLIX INC (NFLX) — SEC Filings

**13 filings** found

## 8-K — Q1 FY2026 (filed 2026-04-16)
Accession: 0001065280-26-000137 | 12 sections | 0 tables

## 8-K — FY2025 (filed 2026-01-20)
Accession: 0001065280-26-000033 | 11 sections | 0 tables

## 8-K (filed 2026-01-20)
Accession: 0001193125-26-015951 | 2 sections | 0 tables

## 8-K (filed 2025-12-22)
Accession: 0001193125-25-327462 | 2 sections | 0 tables

## 8-K (filed 2025-12-05)
Accession: 0001193125-25-308651 | 2 sections | 0 tables

## 8-K (filed 2025-11-14)
Accession: 0001065280-25-000450 | 1 sections | 0 tables

## 8-K (filed 2025-11-04)
Accession: 0001065280-25-000408 | 1 sections | 0 tables

## 8-K (filed 2025-10-30)
Accession: 0001065280-25-000407 | 1 sections | 0 tables

## 8-K — Q3 FY2025 (filed 2025-10-21)
Accession: 0001065280-25-000404 | 10 sections | 0 tables

## 8-K — Q2 FY2025 (filed 2025-07-17)
Accession: 0001065280-25-000322 | 7 sections | 0 tables

## 8-K (filed 2025-06-24)
Accession: 0001065280-25-000287 | 2 sections | 0 tables

## 8-K (filed 2025-06-06)
Accession: 0001065280-25-000286 | 1 sections | 0 tables

## 8-K — Q1 FY2025 (filed 2025-04-17)
Accession: 0001065280-25-000175 | 9 sections | 0 tables

**Tip:** Use `get_filing_section` with a section_id and accession_number above to read section content.

*Keyword "Q2 2026 revenue operating margin guidance outlook" matched no chunks in section "earnings_press_release". Showing the full section (2 chunks) below for browse. Cross-section check: `Q2 2026 revenue operating margin guidance outlook` is not in `earnings_press_release` but DOES appear in `earnings_document_map` — `get_filing_section("NFLX", section_id="earnings_document_map")`.*

[MORE: section has additional content — continue with offset=1 char_offset=3908 (total_chunks=2)]
# NFLX — earnings_press_release
8-K   (filed 2026-04-16)
~5,004 words | Chunks 1-2 of 2

Exhibit 99.1

April 16, 2026

Fellow shareholders,

• Q1 revenue grew 16% year over year (+14% on a FX-neutral basis 1 ) and operating income grew 18%. Both were ahead of our guidance due to slightly higher-than-planned subscription revenue. We continue to project 2026 revenue of $50.7-$51.7B and an operating margin of 31.5%.

• We have a clear strategy and strong conviction in our long runway of growth, with three areas of focus to achieve our goals:

◦ Delivering more entertainment value to members : Our primary internal quality engagement metric hit an all time high in Q1 and we continue to expand our offering with video podcasts, our first regional live event — the World Baseball Classic, which broke viewing records in Japan — and, in early April, a new standalone gaming app for kids.

◦ Leveraging technology to improve our service : We are continually expanding how we can leverage AI to improve the member experience, and in Q1 we acquired InterPositive to provide our creators with a broader set of GenAI tools. We are also redesigning our mobile experience, including the launch of vertical video at the end of the month.

◦ Improving monetization : Our recent price changes have gone well, reflecting the strong value we provide members and our advertising revenue remains on track to reach $3B in 2026, up 2x year-over-year.

• The entertainment business remains extraordinarily dynamic and competitive. We’re in a strong position and are working hard to build on our advantages. Over the years, we’ve learned that the best thing we can do is to stay focused and improve faster than the competition.

Our summary results, and forecast for Q2, are below.

__________________________________

1 Excluding the year over year effect of foreign exchange rate movements and the impact of hedging gains/losses realized as revenues. Assumes foreign exchange rates remained constant with foreign exchange rates from each of the corresponding months of the prior-year period.

Q1 Results and Forecast

Revenue in Q1 grew 16% year over year (+14% on a foreign exchange (F/X) neutral basis), driven primarily by membership growth, higher pricing, and increased ad revenue. Revenue was slightly above our forecast due to higher than forecasted membership growth and favorable F/X movements net of hedging.

Operating income in Q1 was $4.0B, up 18% year over year, and operating margin of 32.3% was up versus 31.7% in Q1’25. Both operating income and margin were slightly above our forecast owing to higher-than-forecasted revenue.

Diluted EPS for the quarter amounted to $1.23 vs. $0.66 in Q1’25 (+86% year over year), above our forecast of $0.76, driven by higher-than-projected operating income and the $2.8B termination fee related to the Warner Bros. transaction, which was recognized in “interest and other income.”

As a reminder, the guidance we provide is our actual internal forecast at the time we report and we strive for accuracy. Our primary financial metrics are revenue for growth and operating margin for profitability. Our goal is to sustain healthy revenue growth, expand operating profit and margin, and deliver growing free cash flow.

Our full year 2026 guidance is unchanged: we forecast 2026 revenue of $50.7B-$51.7B, which represents 12%-14% growth (11%-13% F/X neutral), driven by continued healthy membership growth, pricing and a projected rough doubling of our ads revenue. Similarly, we’re still targeting an operating margin of 31.5% for 2026 based on F/X rates as of January 1, 2026 vs. 29.5% in 2025.

For Q2, we expect revenue growth of 13% (or 12% F/X neutral). As we noted in last quarter’s letter, growth in content amortization will be first-half weighted due to the timing of title launches. We expect Q2 to have the highest year-over-year content amortization growth rate in 2026, before decelerating to mid-to-high single digit growth in the second half of the year. As a result, we forecast Q2 operating margin of 32.6% compared with 34.1% in the year ago quarter. We expect year-over-year operating margin growth in Q3 and Q4 in order to deliver our 2026 margin target.

Our mission remains ambitious and unchanged: to entertain the world. No other entertainment company has tried to program at this scale, for this many tastes, cultures, and languages. Warner Bros. would have been a nice accelerant for our strategy, but only at the right price 2 . We have multiple ways to achieve our goals (including producing, licensing, and partnering) and we’re constantly seeking to allocate our resources to the most attractive opportunities to maximize the value we are delivering to our members. The landscape we are operating in is also more dynamic than ever:

• Streaming continues to take view share from linear.

• Technology is enabling a massive increase in video content from a wide variety of storytellers.

• There are more ways for consumers to connect to the stories they love, including through open content platforms, interactive and gaming services.

• “Premium” content is increasingly defined by the viewer.

• The lines between entertainment on TV and mobile devices are blurring.

__________________________________

2 about.netflix.com/…↗⧉

In such a fast-changing industry, and with so many consumer options, we strive to be a “must have service” — the first place people go for entertainment and the last they cancel. We’ve come a long way since we started streaming in 2007 (we’re now entertaining an audience approaching 1 billion people), but we’re also still incredibly small; we account for an estimated ~5% of TV view share globally, and as of the end of 2025 we penetrated less than 45% of our Total Addressable Market (TAM) of broadband households. We’re optimistic about the future of entertainment and our long runway for growth, and are focused on three areas to achieve our ambition:

First, delivering more entertainment value and winning the most valuable moments of truth. We continue to focus the vast majority of our content budget on core series and films. A measure of our performance is engagement, which is not just the quantity of hours watched, but also the quality of that experience for our audiences. In Q1, we made good progress as our primary internal quality metric reached an all-time high.

We know that not all hours are created equal. When members fall in love with a title, they return to Netflix more frequently (which helps retention), and it also ignites fandom that travels far beyond the screen—boosting word-of mouth and acquisition. An example of this passion was the Q1 launch of Bridgerton S4* (94M views 3 ). Fans joined the stars of Bridgerton at events in more than 20 cities across the globe that even inspired eight real-life proposals at masquerade balls. We saw similar passion with the Q1 return of One Piece S2* (40M views). Given the franchise’s multi-generational fanbase, we recently announced 5 a third season of the series along with a LEGO One Piece animated special and a One Piece anime series. We have an exciting slate for the balance of the year including films Here Comes the Flood with Denzel Washington, Greta Gerwig’s Narnia , and David Fincher’s follow-up to Once Upon a Time In Hollywood ; and series like Will Ferrell’s The Hawk , One Hundred Years of Solitude S2, and Lupin Part 4.

Live event programming is another example of how certain programming can deliver outsized impact. In Q1, we aired more than 70 live events, including our first regional live event with the World Baseball Classic , exclusively for our members in Japan. This massive event delivered 31.4M 6 viewers, becoming our most-watched program ever on Netflix in Japan, and sparked our largest day of sign ups in the country. As a result, among the 190+ countries in which we operate, Japan was the largest contributor to member growth in Q1. Additionally, our March 21st live airing of BTS The Comeback Live delivered 18.4M global viewers 7 , reached the weekly Top 10 in 80 countries and secured the #1 spot in 24 countries. We’ll further build out our live events later this year with the long-awaited heavyweight fight in the UK between Tyson Fury and Anthony Joshua.

We want to win more moments of truth, and we’re doing that by broadening our service to include an even wider range of entertainment options, including video podcasts and games. Our launch of video podcasts features new Netflix originals as well as a curated selection of licensed podcasts across genres our members love—pop culture, lifestyle, true crime, and sports. We’ll continue to add to the podcast catalog, including today’s announcement of new original podcasts from talent like Brian Williams and

__________________________________

3 A view is defined as hours viewed divided by runtime for each title. Views for a title are based on the first 91 days since the release of each episode (less than 91 days denoted with an asterisk and data is from launch date through April 12, 2026). We publish our top titles based on views each week at Netflix Top 10 4 .

4 netflix.com/…↗⧉

5 nbcnews.com/…↗⧉

6 Based on estimated data from Video Research Ltd.; represents the total cumulative number of contacts, including cases where a single person viewed on one or more devices without de‑duplicating overlaps. Includes live streams and archive viewing within 24 hours after the end of each match.

7 Total viewership estimates are derived from first-party data (Live+1).

Evan Ross Katz. While still early, we’re seeing video podcasts over-index on daytime viewing and on mobile devices, an indicator of the potential incremental engagement opportunity as we scale.

In games, we’re focusing on four categories: narrative, party & puzzle, mainstream, and kids games. Earlier this month we launched 8 Netflix Playground 9 , our new standalone gaming app for kids. We believe kids’ games represent a meaningful opportunity to deliver more valued entertainment moments to our members, and we are already seeing encouraging early signals. About 10% of kids’ profiles have played Netflix games and almost half of kids’ profiles view content on mobile devices and tablets. We expect to add several more kids’ games in the coming months. We’re also seeing promising traction for our cloud TV games: our virtual game controller app to play cloud games recently jumped to the top of the most downloaded IOS app chart 10 . Based on our data, we believe game play can have a positive impact on member retention.

Second, using technology to improve every aspect of our service and our business. Building on our roots in Silicon Valley, we’ve been a pioneer in streaming technology, building our own content delivery network ( Open Connect 11 ) and delivering a best‑in‑class discovery experience through personalized recommendations. Over the next few years, we will continue to leverage technology to create a more personalized, more immersive, and more interactive experience for our members.

In addition to continued innovation on our new TV UI, after a period of testing and iteration, we are launching an updated mobile experience at the end of the month that includes a vertical video discovery feed. This redesign will better reflect our expanding entertainment offering and make it easier for members to engage how and when they want.

We’ve been using machine learning and AI for many years, and as the technology advances with GenAI, we continue to find new opportunities to deliver an even more seamless experience for members and expand possibilities for storytellers. This includes using GenAI to improve recommendations for members through deeper content understanding so we can recommend the right title at the right moment, test conversational discovery experiences, and improve the breadth and quality of our promotional assets.

Leveraging GenAI, we are enabling our creative partners with more and better tools to help them tell their stories, with the potential to make our single largest area of spend—content—even more impactful. To accelerate this opportunity, in March we announced our acquisition of InterPositive 12 , the filmmaking technology company founded by Ben Affleck that develops AI‑powered tools built by and for filmmakers.

Third, improving our monetization. Better monetization enables us to invest more in content and the product experience, which increases member value and engagement, and in turn supports long‑term revenue and profit growth and our ability to reinvest to further improve Netflix – driving a virtuous cycle. We deliver industry-leading monetization through a combination of broad distribution, increasingly sophisticated plans and pricing, and a growing ads business.

__________________________________

8 Launched in the US, Canada, UK, Australia, the Philippines and New Zealand, with full global launch on 4/28.

9 usatoday.com/…↗⧉

10 gamefile.news/…↗⧉

11 openconnect.netflix.com/…↗⧉

12 about.netflix.com/…↗⧉

Our distribution partnerships with CE manufacturers, ISPs, and MVPDs extend the accessibility of our service around the world. We’ve recently found success with new types of partners like Mercado Libre in Mexico and Brazil, where bundling Netflix with their e-commerce loyalty program deepened our penetration and complemented our healthy organic distribution in these countries.

Our plans and pricing strategy allows us to offer consumers a wide range of options to suit their needs. Recent price changes have gone well, reflecting the strong and increasing value we provide, and today we announced price adjustments in Spain.

Building out our ads business has been a major monetization priority and we continue to make good progress. Our ads plan (priced at $8.99 in the US) remains very popular, representing over 60% of all Q1 sign ups within our ads countries. We'll launch new products throughout 2026 to help advertisers assess the incrementality of their buys on Netflix, all verified by Netflix's trusted first-party data. Our improved capabilities are attracting many new advertising clients — we now work with over 4,000, up 70% year over year — and we continue to expect ~$3B in ad revenue this year, up 2x from 2025.

In summary, the entertainment industry remains extraordinarily vibrant and intensely competitive. Today, our competitive set includes Alphabet, Amazon, Apple, Comcast, Disney, local media companies around the world, Meta, Roblox, and TikTok, to name a few.

We believe we have meaningful advantages as we strive to become a must‑have service for consumers: a strong global brand, a wide range of high‑quality programming, a best‑in‑class product experience, and a frequent role at the center of culture. Given our global footprint and deep engagement, we believe we provide a superior monetization model for the content we offer, making us a more attractive partner for creators and licensors. To maintain these advantages, we need to keep building our brand, audience, engagement, and monetization so Netflix remains the home for the best storytellers and the default place where consumers choose to spend their entertainment time. In such a dynamic environment, we’ve learned that the best thing we can do is get better faster than the competition.

Cash Flow and Capital Structure

Net cash generated from operating activities was significantly higher in Q1'26, vs. Q1’25, totaling $5.3B compared to $2.8B in the prior year. This increase was driven in part by a $2.8B cash receipt from the Warner Bros.-related termination fee. As a result, free cash flow (FCF) 13 rose to $5.1B in Q1'26, up from $2.7B in Q1'25.

We now expect 2026 FCF of approximately $12.5B, an increase from our previous projection of $11B due primarily to the after-tax impact of the Warner Bros.-related termination fee. We continue to expect an annual cash content spend to amortization ratio of ~1.1x.

Our capital allocation approach is unchanged. We first prioritize reinvestment in the business, both organically and through selective M&A, while maintaining liquidity and then returning excess cash to shareholders through share repurchases. We ended the quarter with gross debt of $14.4B and cash and cash equivalents of $12.3B. Our cash position is more elevated than normal due to the pause in our share repurchase program during the Warner Bros. transaction and the subsequent receipt of the deal termination fee. As we indicated after declining to raise our offer for Warner Bros., we resumed our share repurchase program. During the quarter we repurchased 13.5M shares for $1.3B, leaving $6.8B remaining on our existing share repurchase authorization.

__________________________________

13 Defined as cash provided by (used in) operating activities less purchases of property and equipment.

Governance

Reed Hastings has informed us that he will not stand for re-election to our Board when his current term expires at the Annual Meeting in June, in order to focus on his philanthropy and other pursuits. Reed built a culture of innovation, integrity and high performance that defines who we are today. His vision and leadership pioneered how the world is entertained, and his legacy and impact are not only felt by all of us at Netflix, but by audiences around the world. On behalf of the Board and our shareholders, we extend our deepest thanks for his extraordinary leadership and service.

Reed Hastings, Netflix co-founder and Chairman 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, Netflix co-CEO, 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, Netflix co-CEO, 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.”

For quick reference, our past investor letters can be found here 14 .

___________________________________

14 ir.netflix.net/…/default.aspx↗⧉

Regional Breakdown

F/X Neutral revenue growth excludes the year over year effect of foreign exchange rate movements and the impact of hedging gains/losses realized as revenues. Assumes foreign exchange rates remained constant with foreign exchange rates from each of the corresponding months of the prior-year period.

April 16, 2026 Earnings Interview, 1:45pm PT

Our live video interview will be on youtube/netflixir 15 at 1:45pm PT today.  Co-CEOs Greg Peters and Ted Sarandos, CFO Spence Neumann and VP of Finance & Capital Markets Spencer Wang, will all be on the video to answer questions submitted by sellside analysts.

__________________________________

---
SEC Filing: sec.gov/…↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/earnings_press_release#c0

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
- `earnings_document_map` (Document Map) — ~1,676 words
- `earnings_gaap_reconciliation` (GAAP Reconciliation) — ~77 words
- `earnings_income_statement` (Income Statement) — ~880 words
- `earnings_segment_data` (Segment Data) — ~2,071 words
- `earnings_supplemental_tables` (Supplemental Tables) — ~457 words
- `item_5_02_executive_changes` (Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers) — ~77 words
- `transcript_guidance` (Forward Guidance) — ~2,788 words
- `transcript_prepared_remarks` (Prepared Remarks) — ~300 words
- `transcript_qa_session` (Q&A Session) — ~8,833 words

_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

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# NFLX — transcript_guidance
8-K   (filed 2026-04-16)
~2,788 words | Chunks 1-1 of 1

{
  "guidance_items": [
    {
      "metric": "revenue_growth",
      "value": "12% to 14%",
      "period": "FY2026",
      "speaker": "Gregory K. Peters",
      "verbatim": "But we've seen really good progress so far in this first quarter that builds on the solid momentum and results from 2025. So given that, we are maintaining our guidance, our strong outlook for organic growth that we established for 2026. That's revenue growth of 12% to 14%, operating margin at 31.5%.",
      "context": "Peters framed the company's strong performance in Q1 2026 and reiterated the full-year guidance.",
      "specificity": "wide_range",
      "value_numeric": null,
      "value_numeric_min": 12.0,
      "value_numeric_max": 14.0
    },
    {
      "metric": "operating_margin",
      "value": "31.5%",
      "period": "FY2026",
      "speaker": "Gregory K. Peters",
      "verbatim": "But we've seen really good progress so far in this first quarter that builds on the solid momentum and results from 2025. So given that, we are maintaining our guidance, our strong outlook for organic growth that we established for 2026. That's revenue growth of 12% to 14%, operating margin at 31.5%.",
      "context": "Peters framed the company's strong performance in Q1 2026 and reiterated the full-year guidance.",
      "specificity": "point",
      "value_numeric": 31.5,
      "value_numeric_min": null,
      "value_numeric_max": null
    },
    {
      "metric": "advertising_business_revenue",
      "value": "approximately USD 3 billion",
      "period": "FY2026",
      "speaker": "Gregory K. Peters",
      "verbatim": "That includes roughly doubling the advertising business to about USD 3 billion. Now we ended last year with more than 325 million paid members.",
      "context": "Peters highlighted the expected growth in the advertising business as part of the 2026 outlook.",
      "specificity": "point",
      "value_numeric": 3000000000.0,
      "value_numeric_min": null,
      "value_numeric_max": null
    },
    {
      "metric": "advertising_revenue",
      "value": "$3 billion",
      "period": "FY2026",
      "speaker": "Gregory K. Peters",
      "verbatim": "We continue to expect to deliver that $3 billion in advertising revenue this year. We haven't adjusted that target.",
      "context": "Peters confirmed that the advertising revenue target remains unchanged despite changes in Nielsen's reporting methodology.",
      "specificity": "point",
      "value_numeric": 3000000000.0,
      "value_numeric_min": null,
      "value_numeric_max": null
    }
  ],
  "key_themes": [
    "FY2026 financial guidance and outlook",
    "Growth drivers: advertising and international markets",
    "Content strategy: live events, gaming, and regional expansion",
    "M&A strategy and discipline",
    "Member engagement and quality metrics",
    "Impact of Nielsen methodology changes on advertising",
    "Role of AI in content creation and business operations",
    "Leadership transition and founder succession"
  ],
  "management_hedges": [
    {
      "speaker": "Gregory K. Peters",
      "topic": "member quality metric details",
      "verbatim": "I am not going to detail how we compose our metrics because they often take quite a time and quite an effort to actually build them and to prove them out. I'm sure our competitors would like to get that cheat sheet, but we're not going to give it to them."
    }
  ],
  "analyst_questions": [
    {
      "analyst": "Robert Fishman",
      "firm": "MoffettNathanson",
      "topic": "full year margin guidance and investment",
      "verbatim": "Can you speak to your full year margin guidance and how it compares to prior guidance with the Warner Bros. deal cost. And beyond content spending, where else are you accelerating investment in 2026?",
      "response_type": "answered"
    },
    {
      "analyst": "Sean Diffley",
      "firm": "Morgan Stanley",
      "topic": "M&A appetite post-Warner Bros.",
      "verbatim": "What have been your biggest learnings from the Warner Bros. experience? And does it, in any way, change your appetite for M&A or capital structure going forward?",
      "response_type": "answered"
    },
    {
      "analyst": "Vikram Kesavabhotla",
      "firm": "Baird",
      "topic": "member engagement metrics",
      "verbatim": "Last quarter, you shared that your primary quality metric for engagement achieved an all-time high in 2025. How is this metric performing so far in 2026? What are some examples of the data points that inform your measurement of quality?",
      "response_type": "hedged"
    },
    {
      "analyst": "Rich Greenfield",
      "firm": "LightShed Partners",
      "topic": "Nielsen methodology changes and ad revenue impact",
      "verbatim": "Nielsen adjusted their methodology. The end result was lower streaming viewership and higher broadcast and cable viewership, albeit the trend lines were similar. Curious how you think about the coming impact, especially on your advertising revenue?",
      "response_type": "answered"
    },
    {
      "analyst": "John Hodulik",
      "firm": "UBS",
      "topic": "World Baseball Classic viewership and live sports opportunities",
      "verbatim": "Any details you can share about the World Baseball Classic viewership? Any -- are there other similar sports and live event opportunities out there that can appeal to a global audience in driving engagement?",
      "response_type": "answered"
    },
    {
      "analyst": "Robert Fishman",
      "firm": "MoffettNathanson",
      "topic": "NFL and live event ROI",
      "verbatim": "With the NFL in the market for new packages, do you judge ROI on live event content spending the same way as scripted content? Or does adding NFL games give you the ability to drive higher CPMs and ad growth?",
      "response_type": "answered"
    },
    {
      "analyst": "Peter Supino",
      "firm": "Wolfe Research",
      "topic": "podcasting business strategy",
      "verbatim": "Help us better understand your business model in podcasting. I think he means probably business strategy in podcasting.",
      "response_type": "answered"
    },
    {
      "analyst": "Dan Salmon",
      "firm": "New Street Research",
      "topic": "advertising growth and sales strategy",
      "verbatim": "Can you share more on the growth of your total advertiser base? What proportion of advertisers are being serviced directly by the Netflix sales team and what proportion are buying on Netflix through third-party DSP partners?",
      "response_type": "answered"
    },
    {
      "analyst": "Vikram Kesavabhotla",
      "firm": "Baird",
      "topic": "recent subscription price increases",
      "verbatim": "What informed your decision to raise subscription prices in the U.S. recently? What are your early observations regarding the impact on customer acquisition and churn in the region?",
      "response_type": "answered"
    },
    {
      "analyst": "Eric Sheridan",
      "firm": "Goldman Sachs",
      "topic": "gaming strategy learnings and future investments",
      "verbatim": "You are in your fifth year of the gaming strategy. What have been the key learnings over that period. How do you platform gains change user consumption habits? What do you see as the most interesting areas to invest behind gaming in the coming years?",
      "response_type": "answered"
    },
    {
      "analyst": "Brian Pitz",
      "firm": "BMO Capital",
      "topic": "Netflix Playground and success metrics",
      "verbatim": "The recent announcement of Netflix Playground is seemingly one of your biggest moves into the video game space to date. Would you help us understand how you will measure success with playground and the incremental value you expect it will drive for your broader subscriber base?",
      "response_type": "answered"
    },
    {
      "analyst": "Eric Sheridan",
      "firm": "Goldman Sachs",
      "topic": "competitive landscape for content",
      "verbatim": "Entering 2026, how would you characterize the current competitive landscape for content. Are you seeing any differences in competitive intensity by geography, language and/or format?",
      "response_type": "answered"
    },
    {
      "analyst": "Eric Sheridan",
      "firm": "Goldman Sachs",
      "topic": "AI in creative process and InterPositive acquisition",
      "verbatim": "How does the company's approach to the role AI can play in the creative process continue to evolve. With the announced acquisition of InterPositive, can you discuss the decision around that deal measured against your broader strategy?",
      "response_type": "answered"
    },
    {
      "analyst": "Rich Greenfield",
      "firm": "LightShed Partners",
      "topic": "Reed Hastings' board departure",
      "verbatim": "You've talked publicly that Reed Hastings prefer to build versus buy was Netflix's decision to pursue Warner Bros a key factor in its timing of leaving the Netflix Board this year.",
      "response_type": "answered"
    }
  ],
  "management_tone": {
    "value": "confident",
    "verbatim": "So we really feel great about the business, about the organic growth opportunity ahead, and we are just as energized as ever to achieve our mission to entertain the world."
  },
  "macro_responses": [
    {
      "factor": "fx",
      "stance": "neutral",
      "verbatim": "APAC was our strongest FX-neutral revenue growth market for the quarter and it wasn't just because of this. Actually, we had really strong performance in a number of areas in APAC."
    }
  ],
  "product_transitions": [
    {
      "product": "InterPositive",
      "stage": "announced",
      "expected_period": "very new",
      "verbatim": "With our acquisition vendor-positive we think it accelerates our GenAI capabilities because it's a proprietary technology that was created specifically for filmmakers and specifically for film making and that's different than other AI video applications."
    },
    {
      "product": "Netflix Playground",
      "stage": "announced",
      "expected_period": "in the year to come",
      "verbatim": "And I believe you'll see some interesting -- increasingly interesting releases from us in the year to come. But having said all that, we're going to continue to ramp our investment, which is still currently small relative to our overall spend on content based on demonstrated performance and growing returns to the business."
    }
  ],
  "strategic_priorities": [
    {
      "priority": "Deliver more entertainment value",
      "emphasis_rank": 1,
      "verbatim": "Number one, to deliver even more entertainment value for our members. And we do that by continuing to strengthen our core offering, series and films, originals and license."
    },
    {
      "priority": "Leverage technology to improve the service",
      "emphasis_rank": 2,
      "verbatim": "Number two, we're leveraging technology to improve the service from how it's delivered to how to find great things to watch, and now even how content is created and produced."
    },
    {
      "priority": "Improve monetization",
      "emphasis_rank": 3,
      "verbatim": "And number three, we're improving monetization. We're doing this through a combination of broad distribution, mostly organic, but also supplement with some great partners."
    }
  ],
  "competitive_mentions": [
    {
      "competitor": "Warner Bros.",
      "context_type": "partnership",
      "speaker": "Theodore A. Sarandos",
      "verbatim": "Running Point is produced by Warner Bros. for us. We licensed shows like Watson and Mayor of Kingstown for Paramount."
    },
    {
      "competitor": "Paramount",
      "context_type": "partnership",
      "speaker": "Theodore A. Sarandos",
      "verbatim": "Running Point is produced by Warner Bros. for us. We licensed shows like Watson and Mayor of Kingstown for Paramount."
    },
    {
      "competitor": "Sony",
      "context_type": "partnership",
      "speaker": "Theodore A. Sarandos",
      "verbatim": "We have a Pay-One deal with Sony, we have with NBCUniversal that includes DreamWorks Animation and illumination."
    },
    {
      "competitor": "NBCUniversal",
      "context_type": "partnership",
      "speaker": "Theodore A. Sarandos",
      "verbatim": "We have a Pay-One deal with Sony, we have with NBCUniversal that includes DreamWorks Animation and illumination."
    }
  ],
  "scale_claims": [
    {
      "metric_name": "paid members",
      "value_raw": "more than 325 million",
      "value_numeric": 325000000.0,
      "units": "count",
      "direction": null,
      "timeframe": "ended last year",
      "verbatim": "Now we ended last year with more than 325 million paid members. And as that number continues to grow, we are entertaining an audience that is approaching 1 billion people.",
      "named_entity": null
    },
    {
      "metric_name": "addressable household penetration",
      "value_raw": "under 45%",
      "value_numeric": 45.0,
      "units": "percent",
      "direction": "down",
      "timeframe": "currently",
      "verbatim": "So if you look at it from an addressable household perspective that have good data, that have a smart TV, all those things that we think are enabling, we're still under 45% penetrated in terms of that number.",
      "named_entity": null
    },
    {
      "metric_name": "addressable market share",
      "value_raw": "about 7%",
      "value_numeric": 7.0,
      "units": "percent",
      "direction": null,
      "timeframe": "2026",
      "verbatim": "We've captured about 7% of addressable revenue. This is countries and categories that we currently directly participate in. We now estimate that [ USD 670 billion ] as in 2026, and that number grows, of course, year-over-year as well.",
      "named_entity": null
    },
    {
      "metric_name": "TV view share",
      "value_raw": "only 5%",
      "value_numeric": 5.0,
      "units": "percent",
      "direction": null,
      "timeframe": "globally",
      "verbatim": "And we estimate that we account for only 5% of TV view share globally. So you can pretty much use any measure and say we've got tons of room for growth still ahead of us.",
      "named_entity": null
    },
    {
      "metric_name": "view hours growth",
      "value_raw": "similar rate of growth",
      "value_numeric": null,
      "units": null,
      "direction": "up",
      "timeframe": "second half of 2025",
      "verbatim": "First, just to note that volume of engagement is still relevant, and we still track it, we still seek to grow it. I mean, actually, in Q1, view hours were up at a similar rate of growth to what we saw in the second half of 2025.",
      "named_entity": null
    },
    {
      "metric_name": "member quality metric",
      "value_raw": "another all-time high",
      "value_numeric": null,
      "units": null,
      "direction": "up",
      "timeframe": "Q1 2026",
      "verbatim": "Member quality is an important part of that. Increasing sophistication and measuring our performance, and it's got several associated signals. And in Q1, that primary member quality metric that you referenced, it hit another all-time high.",
      "named_entity": null
    },
    {
      "metric_name": "global TV time",
      "value_raw": "less than 5%",
      "value_numeric": 5.0,
      "units": "percent",
      "direction": null,
      "timeframe": "current position",
      "verbatim": "On your point about growth potential, really independent of the shift. We still see tremendous upside in the business and being able to win more moments of truth, especially the most valuable moments. And with our current position of being less than 5% global TV time, or any other credible measurement out there really, which doesn't change that number that much.",
      "named_entity": null
    },
    {
      "metric_name": "World Baseball Classic viewers",
      "value_raw": "31.4 million viewers",
      "value_numeric": 31400000.0,
      "units": "count",
      "direction": null,
      "timeframe": null,
      "verbatim": "It was the biggest global baseball streaming event of all time. It was 31.4 million viewers. It was really exciting to see how this played out and events like these are super important because they -- as Greg was just saying, they really drive outsized business impact.",
      "named_entity": null
    },
    {
      "metric_name": "Japan member growth",
      "value_raw": "largest single sign-up day ever",
      "value_numeric": null,
      "units": null,
      "direction": "up",
      "timeframe": "WBC drove",
      "verbatim": "But the WBC drove the largest single sign-up day ever in Japan and Japan led our Q1 member growth around the world. And Japan had its highest quarter of paid net adds in our history.",
      "named_entity": null
    },
    {
      "metric_name": "Japan paid net adds",
      "value_raw": "highest quarter",
      "value_numeric": null,
      "units": null,
      "direction": "up",
      "timeframe": "Q1",
      "verbatim": "But the WBC drove the largest single sign-up day ever in Japan and Japan led our Q1 member growth around the world. And Japan had its highest quarter of paid net adds in our history.",
      "named_entity": null
    },
    {
      "metric_name": "advertiser base growth",
      "value_raw": "over 70%",
      "value_numeric": 70.0,
      "units": "percent",
      "direction": "up",
      "timeframe": "2025",
      "verbatim": "Our advertiser base grew over 70% year-to-year in 2025 to be more than 4,000 advertisers. We've seen a pretty good expansion of that advertiser base, which, of course, is a key indicator of the health of that business.",
      "named_entity": null
    },
    {
      "metric_name": "advertisers",
      "value_raw": "more than 4,000",
      "value_numeric": 4000.0,
      "units": "count",
      "direction": "up",
      "timeframe": "2025",
      "verbatim": "Our advertiser base grew over 70% year-to-year in 2025 to be more than 4,000 advertisers. We've seen a pretty good expansion of that advertiser base, which, of course, is a key indicator of the health of that business.",
      "named_entity": null
    },
    {
      "metric_name": "programmatic share of non-live ads",
      "value_raw": "more than 50%",
      "value_numeric": 50.0,
      "units": "percent",
      "direction": "up",
      "timeframe": "on its way",
      "verbatim": "We're seeing through that pretty significant growth in programmatic, which is on its way to becoming more than 50% of our non-live ads business.",
      "named_entity": null
    },
    {
      "metric_name": "member retention",
      "value_raw": "industry-leading",
      "value_numeric": null,
      "units": null,
      "direction": null,
      "timeframe": null,
      "verbatim": "Things like quality weighted engagement, plan selection plan moves, retention, which is industry-leading. So we see improvements in value delivered to our members well in advance of making a price adjustment.",
      "named_entity": null
    },
    {
      "metric_name": "hourly viewing cost (US)",
      "value_raw": "least per hour of viewing",
      "value_numeric": null,
      "units": "currency_usd/hour",
      "direction": "down",
      "timeframe": "in the U.S. right now",
      "verbatim": "And as a comparison point to support that statement, in the U.S. right now, Netflix subscribers are paying the least per hour of viewing compared to other SVOD offerings.",
      "named_entity": null
    },
    {
      "metric_name": "member retention",
      "value_raw": "better year-over-year",
      "value_numeric": null,
      "units": null,
      "direction": "up",
      "timeframe": "this quarter",
      "verbatim": "I just think the retention that we're seeing in the business that kind of the churn factor, the opposite of strong retention, we saw it across the board this quarte

---
SEC Filing: sec.gov/…↗⧉
MetricDuck Viewer: viewer.metricduck.com/…#section-guidance#section-transcript_guidance↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/transcript_guidance#c0

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
- `earnings_document_map` (Document Map) — ~1,676 words
- `earnings_gaap_reconciliation` (GAAP Reconciliation) — ~77 words
- `earnings_income_statement` (Income Statement) — ~880 words
- `earnings_press_release` (Press Release (Narrative)) — ~3,980 words
- `earnings_segment_data` (Segment Data) — ~2,071 words
- `earnings_supplemental_tables` (Supplemental Tables) — ~457 words
- `item_5_02_executive_changes` (Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers) — ~77 words
- `transcript_prepared_remarks` (Prepared Remarks) — ~300 words
- `transcript_qa_session` (Q&A Session) — ~8,833 words

_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

# NFLX — transcript_qa_session
8-K   (filed 2026-04-16)
**Keyword search:** "M&A acquisition costs operating margin guidance 2026" — 1 matching chunk

**[Chunk 1 of 4]**
## **Question and Answer** 

## **Spencer Wang** 

## _Vice President of Finance, Corporate Development & Investor Relations_ 

We'll now take questions submitted by the analyst community, and we'll begin on the topic of our results and outlook. The first question comes from Robert Fishman of MoffettNathanson. His question is, can you speak to your full year margin guidance and how it compares to prior guidance with the Warner Bros. deal cost. And beyond content spending, where else are you accelerating investment in 2026? 

## **Gregory K. Peters** 

## _Co-CEO, President & Director_ 

Perhaps I can kick this one off and just sort of step back and do a little bit of high-level framing. Of course, it's early in the year. There's still plenty of time to go, plenty of work left to go do. But we've seen really good progress so far in this first quarter that builds on the solid momentum and results from 2025. So given that, we are maintaining our guidance, our strong outlook for organic growth that we established for 2026. That's revenue growth of 12% to 14%, operating margin at 31.5%. 

That includes roughly doubling the advertising business to about USD 3 billion. Now we ended last year with more than 325 million paid members. And as that number continues to grow, we are entertaining an audience that is approaching 1 billion people, which is an exciting milestone to strive for, and it will be an exciting milestone to achieve. But even given that number, we still have plenty of room to grow into our addressable market. 

So if you look at it from an addressable household perspective that have good data, that have a smart TV, all those things that we think are enabling, we're still under 45% penetrated in terms of that number. We think that number is roughly 800 million, and it grows every year, obviously. We've captured about 7% of addressable revenue. This is countries and categories that we currently directly participate in. We now estimate that [ USD 670 billion ] as in 2026, and that number grows, of course, year-over-year as well. And we estimate that we account for only 5% of TV view share globally. So you can pretty much use any measure and say we've got tons of room for growth still ahead of us. 

## **Theodore A. Sarandos** 

## _Co-CEO, President & Director_ 

Yes. And I'd just add, Greg, looking ahead, we're focused on 3 big priorities. Number one, to deliver even more entertainment value for our members. And we do that by continuing to strengthen our core offering, series and films, originals and license. But we also are pushing into new categories that are really exciting [indiscernible] further expansion to podcast. We announced a few exciting new ones just today. We're adding more regional live sports events, like the incredible event we just did in Japan with World Baseball Classic, and we're growing our games offering, including a brand-new kids gaming app. 

Number two, we're leveraging technology to improve the service from how it's delivered to how to find great things to watch, and now even how content is created and produced. And we're -- number three, we're improving monetization. We're doing this through a combination of broad distribution, mostly organic, but also supplement with some great partners. We have increasingly sophisticated pricing and pricing plans, and we have a great and growing ad business, as Craig just said. 

These features help position us to deliver multiyear growth. We think beyond the 12% to 14% that we expect to deliver this year. At Netflix, we kind of -- we embrace change. We thrive on competition. We stay focused on constant and consistent improvements, all the things that make us faster and better than the competition in whatever form the competition takes. So we really feel great about the business, about the organic growth opportunity ahead, and we are just as energized as ever to achieve our mission to entertain the world. Spence, maybe you could talk a second about the WB deal costs and the guide. 

## **Spencer Adam Neumann** 

## _Chief Financial Officer_ 

Yes, sure. Thanks, Ted. So with respect to the Warner Bros. deal and those costs and how it impacts the guide, so you may recall back in January, our initial forecast or guidance for the year was carrying $275 million of kind of cost for M&A-related activity, but that wasn't just Warner Bros. actually. So one thing that we were carrying in there was the InterPositive acquisition. It wasn't announced yet, but it was in our guidance, and that carries through also through our OpEx. 

Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. **spglobal.com/marketintelligence** 

**5** 

**NETFLIX, INC. FQ1 2026 EARNINGS CALL - PRELIMINARY COPY  APR 16, 2026** 

So that's kind of hitting our operating margin. And for Warner Bros. specifically, even though we obviously walked away from the deal and some of our initially planned costs for the deal, they won't fully materialize, but also some that we were planning to carry into '27 were pulled forward into 2026. So when you kind of put all that together, we're still in the ballpark, frankly, of the total that we were projecting for M&A-related expenses in the year. There's no material impact on our operating margin outlook. And as a result, there's not a reflection of some increase or acceleration in other expenses in the year. 

## **Spencer Wang** 

## _Vice President of Finance, Corporate Development & Investor Relations_ 

Thanks, Spence. Thanks, Ted. Thanks, Greg. Well, following up on that question, we have from Sean Diffley of Morgan Stanley. His question is, what have been your biggest learnings from the Warner Bros. experience? And does it, in any way, change your appetite for M&A or capital structure going forward? 

## **Theodore A. Sarandos** 

## _Co-CEO, President & Director_ 

So 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. We are very confident in the core business. So we've really looked at this going into it. Our biggest risk was losing focus on our core business while we're working on the transaction. So as you can see from our Q1 results, we did not lose focus. We're very encouraged by the team's ability to stay focused on our core business while exploring this opportunity as well. . 

Historically, we've been builders and not buyers. So there were certainly questions internally and externally about our ability to do a deal of the size. What we did learn though is that our teams were more than up to the task. We've learned so much about deal execution, about early integration. We're really proud of the team that did all that work. We were proud to win the bid. We are confident in our ability to get to the finish line with regulators for the approvals that we needed. 

And -- but mostly, we really built our M&A muscle. And the most important benefit of this entire exercise though was that we tested our 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. And doing it at this level, I think, sets up our teams to understand that, that's the expectation of them day to day. I would like to add, though, that we met a bunch of great people in WBD during this process. So if there's any emotion in all of this, it was the disappointment of not getting to work with those folks, and we're really looking forward to that. 

We do -- but we do come through this with no change in our capital allocation philosophy. We invest in the business both organically and opportunistically with M&A, like you just saw with InterPositive and we do that while maintaining strong liquidity and returning excess cash to shareholders through share repurchase. So M&A for us remains a tool to help us achieve our goals. And as you can see with the WB deal, we'll remain very disciplined in how we approach it. 

## **Spencer Wang** 

_Vice President of Finance, Corporate Development & Investor Relations_ 

Thank you, Ted. I'll move this along now to the next topic, which is on engagement. And the question here comes from Vikram Kesavabhotla of Baird. The question is, last quarter, you shared that your primary quality metric for engagement achieved an all-time high in 2025. How is this metric performing so far in 2026? What are some examples of the data points that inform your measurement of quality? 

## **Gregory K. Peters** 

_Co-CEO, President & Director_ 

Sure, I'll take this one. First, just to note that volume of engagement is still relevant, and we still track it, we still seek to grow it. I mean, actually, in Q1, view hours were up at a similar rate of growth to what we saw in the second half of 2025. And that's actually despite having the Winter Olympics 17 days of robust streaming [ competition land ] in Q1 as well. . 

But as we said and as you alluded to here, while view hours are important, it's actually just one of several metrics that we look at, and we're increasingly trying to make that a more sophisticated view. Member quality is an important part of that. Increasing sophistication and measuring our performance, and it's got several associated signals. And in Q1, that primary member quality metric that you referenced, it hit another all-time high. So we're making good progress there. We're excited about that. 

I am not going to detail how we compose our metrics because they often take quite a time and quite an effort to actually build them and to prove them out. I'm sure our competitors would like to get that cheat sheet, but we're not going to give it to them. But I will say 

Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. **spglobal.com/marketintelligence** 

**6** 

**NETFLIX, INC. FQ1 2026 EARNINGS CALL - PRELIMINARY COPY  APR 16, 2026** 

this that we build confidence in our metrics and specifically this member quality metric, as well as assess how we evolve and improve those metrics over time by evaluating their predictive and explanatory power to really important primary metrics like retention. 

So that's why we are clear that improving that number improves the business. And expanding on this, I would say, as we invest into new forms of content, we also have to learn how the new programming provides different kinds of value. I think live is a really great example of this. It often drives really significant viewing value for our members, albeit with fewer view hours than perhaps a scripted series. It's also got different acquisition characteristics. So these are all things that we have to continually understand better. We have to build models for how that programming matters to our members. We've got to figure out how that supports the business and then, of course, we can bid appropriately based on that. 

## **Spencer Wang** 

## _Vice President of Finance, Corporate Development & Investor Relations_ 

Our next question on engagement comes from Rich Greenfield of LightShed Partners. Nielsen adjusted their methodology. The end result was lower streaming viewership and higher broadcast and cable viewership, albeit the trend lines were similar. Nielsen has delayed implementing these changes into its monthly gauge report until 2026. The base of Netflix viewership will be lower, but also have more room to take share. Curious how you think about the coming impact, especially on your advertising revenue? 

## **Gregory K. Peters** 

## _Co-CEO, President & Director_ 

So Nielsen's methodology change in the gauge reporting is a change in how they calculate the national TV universe. So it's not a change in how people actually watch TV. It changes Nielsen's numbers, and those are really a methodology change. They're not reflecting any actual viewing behaviors. It's just simply a change how they think about relative viewing methodologies. So specifically, the new approach is, again, in the details, reduces the weight of streaming on the households. It increases the weight of linear households, which makes streaming look smaller and broadcast cable look larger on a relative basis as they measure and report. 

Now of course, we have the actual data on how much member stream. We include that in our engagement report. I think that methodology is very straightforward. Other streamers have started to measure views in that same way. So just note that. Turning to the question, how does this impact our advertising. The Nielsen gauge is not the currency for the video marketplace. And given that there is no change in consumer behavior or amount of viewing related to this shift, none of this changes our effectiveness or our aspirations in the ad space. 

We continue to expect to deliver that $3 billion in advertising revenue this year. We haven't adjusted that target. On your point about growth potential, really independent of the shift. We still see tremendous upside in the business and being able to win more moments of truth, especially the most valuable moments. And with our current position of being less than 5% global TV time, or any other credible measurement out there really, which doesn't change that number that much. We've got just a ton of room to grow in this space. 

## **Spencer Wang** 

## _Vice President of Finance, Corporate Development & Investor Relations_ 

Greg. We have several questions that have come in about our content and content strategy. The first, I'll begin with John Hodulik of UBS. Any details you can share about the World Baseball Classic viewership. Any -- are there other similar sports and live event opportunities out there that can appeal to a global audience in driving engagement? 

## **Theodore A. Sarandos** 

## _Co-CEO, President & Director_ 

Thanks for asking, John, about the World Baseball Classic because it was a hit. It was amazing. In fact, it was the most watched program we've ever had in Japan. It is the biggest global baseball streaming event of all time. It was 31.4 million viewers. It was really exciting to see how this played out and events like these are super important because they -- as Greg was just saying, they really drive outsized business impact, and they're kind of a proof point that all engagement is not created equal. 

For those few days that it was really an incredible time for our members in Japan. But the WBC drove the largest single sign-up day ever in Japan and Japan led our Q1 member growth around the world. And Japan had its highest quarter of paid net adds in our history. It's also the kind of it was the first big regional live event for us outside of the U.S., which was great. And we got to flex our new muscle here really, which was streaming multiple games concurrently. So a big expansion of our capabilities. It's very, very exciting. So we were excited, the fans were thrilled and the leagues were super excited. So yes, much more to come. 

Copyright © 2026 S&P Global Market Intelligence, a division of S&P Global Inc. All Rights reserved. **spglobal.com/marketintelligence** 

**7** 

**NETFLIX, INC. FQ1 2026 EARNINGS CALL - PRELIMINARY COPY  APR 16, 2026** 

## **Gregory K. Peters** 

_Co-CEO, President & Director_ 

I think also a great example of how we were firing on all cylinders cross-functionally. So whether our marketing teams, our partnership team is working to make sure that we're bringing this to Japanese consumers in a friendly way. It was really impressive to see everyone organize around that. 

## **Theodore A. Sarandos** 

_Co-CEO, President & Director_ 

And a great shot in the arm for our ad sales group in Japan. 

## **Spencer Adam Neumann** 

## _Chief Financial Officer_ 

---
SEC Filing: sec.gov/…↗⧉
MetricDuck Viewer: viewer.metricduck.com/…#section-qa-session#section-transcript_qa_session↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/transcript_qa_session#c0

1 chunk matched "M&A acquisition costs operating margin guidance 2026". Remove query to browse full section.

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
- `earnings_document_map` (Document Map) — ~1,676 words
- `earnings_gaap_reconciliation` (GAAP Reconciliation) — ~77 words
- `earnings_income_statement` (Income Statement) — ~880 words
- `earnings_press_release` (Press Release (Narrative)) — ~3,980 words
- `earnings_segment_data` (Segment Data) — ~2,071 words
- `earnings_supplemental_tables` (Supplemental Tables) — ~457 words
- `item_5_02_executive_changes` (Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers) — ~77 words
- `transcript_guidance` (Forward Guidance) — ~2,788 words
- `transcript_prepared_remarks` (Prepared Remarks) — ~300 words

_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

# NFLX — earnings_document_map
8-K   (filed 2026-04-16)
**Keyword search:** "Q2 2026 revenue forecast outlook guidance" — 1 matching chunk

**[Chunk 1 of 1]**
Key Metrics: Revenue: $50.7 (+16%)

[Compact map — narrative is indexed as [PROSE #N] entries. Read the full press-release prose (highlights, outlook/guidance, CEO commentary) via section_id=earnings_press_release (use query= to target, e.g. "outlook").]

[PROSE #1: Exhibit 99.1… | ~2 words]

[PROSE #2: April 16, 2026… | ~3 words]

[PROSE #3: Fellow shareholders,… | ~2 words]

[PROSE #4: • Q1 revenue grew 16% year over year (+14% on a FX-neutral basis 1 ) and operati… | ~46 words]

[PROSE #5: • We have a clear strategy and strong conviction in our long runway of growth, w… | ~24 words]

[PROSE #6: ◦ Delivering more entertainment value to members : Our primary internal quality … | ~59 words]

[PROSE #7: ◦ Leveraging technology to improve our service : We are continually expanding ho… | ~58 words]

[PROSE #8: ◦ Improving monetization : Our recent price changes have gone well, reflecting t… | ~33 words]

[PROSE #9: • The entertainment business remains extraordinarily dynamic and competitive. We… | ~45 words]

[PROSE #10: Our summary results, and forecast for Q2, are below.… | ~9 words]

[TABLE #1: earnings_income_statement | income_statement | 9 rows | None]

[PROSE #11: __________________________________… | ~1 words]

[PROSE #12: 1 Excluding the year over year effect of foreign exchange rate movements and the… | ~41 words]

[TABLE #2: earnings_supplemental_tables | unknown | 12 rows | millions]

[PROSE #13: Q1 Results and Forecast… | ~4 words]

[PROSE #14: Revenue in Q1 grew 16% year over year (+14% on a foreign exchange (F/X) neutral … | ~47 words]

[PROSE #15: Operating income in Q1 was $4.0B, up 18% year over year, and operating margin of… | ~36 words]

[PROSE #16: Diluted EPS for the quarter amounted to $1.23 vs. $0.66 in Q1’25 (+86% year over… | ~45 words]

[PROSE #17: As a reminder, the guidance we provide is our actual internal forecast at the ti… | ~54 words]

[PROSE #18: Our full year 2026 guidance is unchanged: we forecast 2026 revenue of $50.7B-$51… | ~60 words]

[PROSE #19: For Q2, we expect revenue growth of 13% (or 12% F/X neutral). As we noted in las… | ~98 words]

[PROSE #20: Our mission remains ambitious and unchanged: to entertain the world. No other en… | ~95 words]

[PROSE #21: • Streaming continues to take view share from linear.… | ~9 words]

[PROSE #22: • Technology is enabling a massive increase in video content from a wide variety… | ~16 words]

[PROSE #23: • There are more ways for consumers to connect to the stories they love, includi… | ~23 words]

[PROSE #24: • “Premium” content is increasingly defined by the viewer.… | ~9 words]

[PROSE #25: • The lines between entertainment on TV and mobile devices are blurring.… | ~12 words]

[PROSE #26: __________________________________… | ~1 words]

[PROSE #27: 2 about.netflix.com/…↗⧉ | ~2 words]

[TABLE #3: earnings_supplemental_tables | unknown | 4 rows | None]

[PROSE #28: In such a fast-changing industry, and with so many consumer options, we strive t… | ~113 words]

[PROSE #29: First, delivering more entertainment value and winning the most valuable moments… | ~71 words]

[PROSE #30: We know that not all hours are created equal. When members fall in love with a t… | ~179 words]

[PROSE #31: Live event programming is another example of how certain programming can deliver… | ~146 words]

[PROSE #32: We want to win more moments of truth, and we’re doing that by broadening our ser… | ~80 words]

[PROSE #33: __________________________________… | ~1 words]

[PROSE #34: 3 A view is defined as hours viewed divided by runtime for each title. Views for… | ~65 words]

[PROSE #35: 4 netflix.com/…↗⧉ | ~2 words]

[PROSE #36: 5 nbcnews.com/…↗⧉ | ~2 words]

[PROSE #37: 6 Based on estimated data from Video Research Ltd.; represents the total cumulat… | ~46 words]

[PROSE #38: 7 Total viewership estimates are derived from first-party data (Live+1).… | ~10 words]

[TABLE #4: earnings_income_statement | (in thousands, except per share data) | 15 rows | thousands | periods: FY2026, FY2025, FY2025]

[PROSE #39: Evan Ross Katz. While still early, we’re seeing video podcasts over-index on day… | ~29 words]

[PROSE #40: In games, we’re focusing on four categories: narrative, party & puzzle, mainstre… | ~140 words]

[PROSE #41: Second, using technology to improve every aspect of our service and our business… | ~72 words]

[PROSE #42: In addition to continued innovation on our new TV UI, after a period of testing … | ~59 words]

[PROSE #43: We’ve been using machine learning and AI for many years, and as the technology a… | ~75 words]

[PROSE #44: Leveraging GenAI, we are enabling our creative partners with more and better too… | ~63 words]

[PROSE #45: Third, improving our monetization. Better monetization enables us to invest more… | ~66 words]

[PROSE #46: __________________________________… | ~1 words]

[PROSE #47: 8 Launched in the US, Canada, UK, Australia, the Philippines and New Zealand, wi… | ~19 words]

[PROSE #48: 9 usatoday.com/…↗⧉ | ~2 words]

[PROSE #49: 10 gamefile.news/…↗⧉ | ~2 words]

[PROSE #50: 11 openconnect.netflix.com/…↗⧉ | ~2 words]

[PROSE #51: 12 about.netflix.com/…↗⧉ | ~2 words]

[TABLE #5: earnings_balance_sheet | (in thousands) | 25 rows | thousands | periods: FY2026, FY2025]

[PROSE #52: Our distribution partnerships with CE manufacturers, ISPs, and MVPDs extend the … | ~54 words]

[PROSE #53: Our plans and pricing strategy allows us to offer consumers a wide range of opti… | ~41 words]

[PROSE #54: Building out our ads business has been a major monetization priority and we cont… | ~103 words]

[PROSE #55: In summary, the entertainment industry remains extraordinarily vibrant and inten… | ~35 words]

[PROSE #56: We believe we have meaningful advantages as we strive to become a must‑have serv… | ~126 words]

[PROSE #57: Cash Flow and Capital Structure… | ~5 words]

[PROSE #58: Net cash generated from operating activities was significantly higher in Q1'26, … | ~57 words]

[PROSE #59: We now expect 2026 FCF of approximately $12.5B, an increase from our previous pr… | ~42 words]

[PROSE #60: Our capital allocation approach is unchanged. We first prioritize reinvestment i… | ~115 words]

[PROSE #61: __________________________________… | ~1 words]

[PROSE #62: 13 Defined as cash provided by (used in) operating activities less purchases of … | ~16 words]

[TABLE #6: earnings_cash_flow | (unaudited) | 30 rows | None | periods: FY2026, FY2025, FY2025]

[PROSE #63: Governance… | ~1 words]

[PROSE #64: Reed Hastings has informed us that he will not stand for re-election to our Boar… | ~102 words]

[PROSE #65: Reed Hastings, Netflix co-founder and Chairman said: “Netflix changed my life in… | ~100 words]

[PROSE #66: Ted Sarandos, Netflix co-CEO, said: “Reed has been a singular source of inspirat… | ~74 words]

[PROSE #67: Greg Peters, Netflix co-CEO, said: “Reed will always be Netflix’s founder and bi… | ~47 words]

[PROSE #68: For quick reference, our past investor letters can be found here 14 .… | ~13 words]

[PROSE #69: ___________________________________… | ~1 words]

[PROSE #70: 14 ir.netflix.net/…↗⧉ | ~2 words]

[TABLE #7: earnings_cash_flow | cash_flow | 3 rows | None | periods: FY2026, FY2025, FY2025]

[PROSE #71: Regional Breakdown… | ~2 words]

[TABLE #8: earnings_segment_data | segment_revenue | 5 rows | None | periods: FY2025, FY2024]

[PROSE #72: F/X Neutral revenue growth excludes the year over year effect of foreign exchang… | ~44 words]

[TABLE #9: earnings_segment_data | segment_revenue | 5 rows | None | periods: FY2025, FY2024]

[PROSE #73: April 16, 2026 Earnings Interview, 1:45pm PT… | ~7 words]

[PROSE #74: Our live video interview will be on youtube/netflixir 15 at 1:45pm PT today. Co-… | ~44 words]

[TABLE #10: earnings_segment_data | segment_revenue | 5 rows | None | periods: FY2025, FY2024]

[PROSE #75: __________________________________… | ~1 words]

[PROSE #76: 15 youtube.com/…↗⧉ | ~2 words]

[TABLE #11: earnings_segment_data | segment_revenue | 5 rows | None | periods: FY2025, FY2024]

[PROSE #77: Use of Non-GAAP Measures… | ~4 words]

[PROSE #78: This shareholder letter and its attachments include reference to the non-GAAP fi… | ~242 words]

[PROSE #79: Forward-Looking Statements… | ~2 words]

[PROSE #80: This shareholder letter contains certain forward-looking statements within the m… | ~325 words]

[TABLE #12: earnings_segment_data | segment_revenue | 6 rows | None | periods: FY2026, FY2025]

[PROSE #81: Netflix, Inc.… | ~2 words]

[PROSE #82: Consolidated Statements of Operations… | ~4 words]

[PROSE #83: (unaudited)… | ~1 words]

[PROSE #84: (in thousands, except per share data)… | ~6 words]

[TABLE #13: earnings_income_statement | income_statement | 5 rows | None]

[PROSE #85: * Share and per share amounts have been retroactively adjusted to reflect the te… | ~24 words]

[TABLE #14: earnings_gaap_reconciliation | Non-GAAP Net Debt | 3 rows | None]

[PROSE #86: Netflix, Inc.… | ~2 words]

[PROSE #87: Consolidated Balance Sheets… | ~3 words]

[PROSE #88: (in thousands)… | ~2 words]

[TABLE #15: unclassified]

[PROSE #89: * Total streaming content obligations are comprised of content liabilities inclu… | ~45 words]

[TABLE #16: unclassified]

[PROSE #90: Netflix, Inc.… | ~2 words]

[PROSE #91: Consolidated Statements of Cash Flows… | ~5 words]

[PROSE #92: (unaudited)… | ~1 words]

[PROSE #93: (in thousands)… | ~2 words]

[TABLE #17: unclassified]

[TABLE #18: unclassified]

[PROSE #94: Netflix, Inc.… | ~2 words]

[PROSE #95: Non-GAAP Information… | ~2 words]

[PROSE #96: (unaudited)… | ~1 words]

[PROSE #97: (in thousands, except percentages)… | ~4 words]

[PROSE #98: Non-GAAP Free Cash Flow… | ~4 words]

[TABLE #19: unclassified]

[PROSE #99: Non-GAAP Constant Currency Information… | ~4 words]

[PROSE #100: The tables below provide a non-GAAP reconciliation of reported and constant curr… | ~61 words]

[TABLE #20: unclassified]

[TABLE #21: unclassified]

[TABLE #22: unclassified]

[TABLE #23: unclassified]

[TABLE #24: unclassified]

[TABLE #25: unclassified]

[TABLE #26: unclassified]

[PROSE #101: Non-GAAP F/X Neutral Operating Margin… | ~5 words]

[PROSE #102: To provide additional transparency around our operating margin, we disclose each… | ~61 words]

[TABLE #27: unclassified]

[PROSE #103: * Based on F/X rates at the beginning of each year including our F/X hedges at t… | ~45 words]

[PROSE #104: Non-GAAP Net Debt… | ~3 words]

[TABLE #28: unclassified]

[TABLE #29: unclassified]

---
SEC Filing: sec.gov/…↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/earnings_document_map#c0

1 chunk matched "Q2 2026 revenue forecast outlook guidance". Remove query to browse full section.

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
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- `transcript_prepared_remarks` (Prepared Remarks) — ~300 words
- `transcript_qa_session` (Q&A Session) — ~8,833 words

_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

# NFLX — earnings_supplemental_tables
8-K   (filed 2026-04-16)
~457 words | Chunks 1-1 of 1

**Table 7** (unknown, millions)

**Table 9** (unknown, scale not detected)

| IR Contact: | PR Contact: |
| Lowell Singer | Emily Feingold |
| VP, Investor Relations | VP, Corporate Communications |
| 818 434-2141 | 323 287-0756 |

---
SEC Filing: sec.gov/…↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/earnings_supplemental_tables#c0

End of section.

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
- `earnings_document_map` (Document Map) — ~1,676 words
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- `item_5_02_executive_changes` (Item 5.02 — Departure of Directors or Certain Officers; Election of Directors; Appointment of Certain Officers; Compensatory Arrangements of Certain Officers) — ~77 words
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- `transcript_prepared_remarks` (Prepared Remarks) — ~300 words
- `transcript_qa_session` (Q&A Session) — ~8,833 words

_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

# NFLX — earnings_income_statement
8-K   (filed 2026-04-16)
~880 words | Chunks 1-1 of 1

**Table 0** (income_statement, scale not detected)

**(in thousands, except per share data)** (income_statement, thousands)
*Period columns: Column 1: FY2026 [CURRENT]; Column 3: FY2025 [PRIOR]; Column 5: FY2025 [PRIOR]*

**Table 26** (income_statement, scale not detected)

---
SEC Filing: sec.gov/…↗⧉
Accession: 0001065280-26-000137
Citation: mdck://NFLX/0001065280-26-000137/earnings_income_statement#c0

End of section.

**Other sections in this filing:**
- `earnings_balance_sheet` (Balance Sheet) — ~432 words
- `earnings_cash_flow` (Cash Flow Statement) — ~1,003 words
- `earnings_document_map` (Document Map) — ~1,676 words
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_Drill in via `get_filing_section(cik="0001065280", accession_number="0001065280-26-000137", section_id="...")`._

DigestPayload · 4,558 chars

All data is in hand. Here is the complete answer.

---

**Sources:** 8-K filed 2026-04-16 (accession 0001065280-26-000137) — earnings press release (shareholder letter) and earnings call transcript Q&A. Both are within the April 16, 2026 vantage date.

---

## (a) Q2 2026 Revenue and Operating Margin Guidance

**Revenue Forecast — Shareholder Letter (Table 0, earnings_income_statement):**

| Metric | Q2 2025 Actual | Q2 2026 Forecast |
|---|---|---|
| Revenue | $11,079M | **$12,574M** |
| Y/Y Growth | 15.9% | **~13.5%** (13% per letter prose; 12% FX-neutral) |
| Operating Income | $3,775M | $4,105M |
| Operating Margin | **34.1%** | **32.6%** |

The shareholder letter states explicitly: *"For Q2, we expect revenue growth of 13% (or 12% F/X neutral)...we forecast Q2 operating margin of 32.6% compared with 34.1% in the year ago quarter."*

**Operating margin vs. year-ago:** 32.6% (Q2 2026 guide) vs. 34.1% (Q2 2025 actual) — a year-over-year **decline of ~150 basis points**. The letter explains this is because content amortization growth is front-half weighted due to title launch timing; Q2 is expected to be the peak YoY content amortization growth quarter in 2026, before decelerating to mid-to-high single digits in H2. Netflix expects YoY margin expansion in Q3 and Q4 to still deliver the 31.5% full-year target.

---

## (b) CFO Explanation of M&A-Related Costs in 2026 Guidance

Responding to Robert Fishman of MoffettNathanson on the April 16 earnings call, **CFO Spencer Neumann** explained (verbatim, transcript_qa_session):

> *"So with respect to the Warner Bros. deal and those costs and how it impacts the guide, so you may recall back in January, our initial forecast or guidance for the year was carrying **$275 million of kind of cost for M&A-related activity**, but that wasn't just Warner Bros. actually. So one thing that we were carrying in there was the **InterPositive acquisition**. It wasn't announced yet, but it was in our guidance, and that carries through also through our OpEx. So that's kind of hitting our operating margin. And for Warner Bros. specifically, even though we obviously walked away from the deal and some of our initially planned costs for the deal, they won't fully materialize, but also **some that we were planning to carry into '27 were pulled forward into 2026**. So when you kind of put all that together, we're still in the ballpark, frankly, of the total that we were projecting for M&A-related expenses in the year. **There's no material impact on our operating margin outlook.** And as a result, there's not a reflection of some increase or acceleration in other expenses in the year."*

**Summary of Neumann's three-part logic:**
1. The January guidance embedded **~$275M** in M&A costs — comprising both Warner Bros. deal work and the (then-unannounced) InterPositive acquisition, the latter flowing through OpEx and weighing on operating margin.
2. Warner Bros. costs partially offset each other: some planned WBD costs won't be incurred (deal abandoned), but some originally deferred to 2027 were **accelerated into 2026**.
3. Net effect: the total M&A cost pool for 2026 remains roughly in line with the original $275M estimate — **no material change** to the 31.5% FY2026 operating margin target.

---

FINAL ANSWER:

**(a) Q2 2026 Guidance (from Q1 2026 shareholder letter, 8-K filed 2026-04-16):**
- **Revenue forecast: $12,574 million** (~13.5% YoY; stated in prose as "13% growth, or 12% FX-neutral")
- **Operating margin: 32.6%** vs. **34.1% in Q2 2025** (year-ago quarter) — a ~150 basis point year-over-year decline, driven by front-half-weighted content amortization growth; YoY margin expansion expected in Q3 and Q4 to reach the 31.5% full-year target.

**(b) CFO Spencer Neumann's explanation of M&A costs (earnings call Q&A, April 16, 2026):**
- The January 2026 guidance already embedded **~$275 million** of M&A-related costs, covering not only the Warner Bros. pursuit but also the **InterPositive acquisition** (unannounced at the time, but included in the plan and running through OpEx, thus hitting operating margin).
- When Netflix walked away from Warner Bros., some planned WBD costs did not materialize — but some costs originally slated for 2027 were **pulled forward into 2026**.
- These two effects roughly offset each other, keeping the total 2026 M&A expense "in the ballpark" of the original $275M.
- **Net operating margin impact: none material** — the 31.5% FY2026 margin target is unchanged, and there is no incremental acceleration of other expenses.