Investors Don’t Like Netflix’s Latest Outlook—Or the News that Reed Hastings Is Moving On

• Netflix shares plunged in extended trading Thursday after the streaming giant gave a disappointing outlook.

• The company also said Co-founder and Chair Reed Hastings plans to leave Netflix’s board in June.

Investors aren’t cheering Netflix’s latest showing.

Shares of the streaming giant were down more than 8% in extended trading after the company gave a softer-than-expected outlook and said one of its co-founders is leaving. The news overshadowed quarterly profits and revenues that topped estimates.

Netflix (NFLX) said it expects 13% revenue growth in the current quarter, just short of the 14% analysts surveyed by Visible Alpha called for. The company pointed to rising content amortization, or expenses tied the timing of title launches, for holding back profits.

Netflix’s stock rallied in the weeks leading up to Thursday’s report, after the company pulled out of what threatened to be an expensive bidding war for Warner Bros. Discovery and raised prices. However, expectations of growing expenses are souring sentiment.

Netflix said that it expects its content amortization growth to peak this quarter, before slowing in the second half of the year. Its full-year revenue guidance was left unchanged at $50.7 billion to $51.7 billion.

The company reported earnings per share of $1.23 on a 16% year-over-year jump in revenue to $12.25 billion for the first quarter, ahead of analysts’ expectations.

Co-founder Reed Hastings is set to leave his position as chair of Netflix’s board in June. He will “focus on his philanthropy and other pursuits,” the company said.

Hastings, previously Netflix’s CEO, became co-CEO alongside Ted Sarandos in 2020, then left that role in 2023 to be replaced by Greg Peters. “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,” Hastings said in a statement.

Shares of Netflix were up about 15% for the year heading into Thursday’s report, though still about 20% off their highs last summer.

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