Reed Hastings, the chairman of Netflix and co-founder of the streaming service 29 years ago, is stepping down as the company recovers from the loss of its $72 billion US deal for Warner Bros. Discovery.
Netflix announced in a letter to investors that Hastings will not seek re-election at the annual meeting in June and intends to shift his focus to philanthropy and other interests.
Following the news of Hastings’ departure, the company’s stock dropped approximately eight percent. Hastings is recognized for his role in transforming the delivery of movies and TV shows to homes, disrupting the traditional business model of Hollywood.
Richard Greenfield, a media analyst at LightShed Partners, commented, “Netflix is experiencing double-digit revenue growth, expanding margins by 2026, and generating substantial free cash flow. While the financials for Q1 were uneventful, investors were rattled by Reed Hastings’ exit.”
Netflix reiterated in a 14-page shareholder letter that its mission to entertain a global audience with diverse content offerings remains steadfast. The company’s outlook for the full year remains unchanged.
Paramount Skydance made a hostile takeover bid for Warner Bros. Discovery for $108 billion US just days after Netflix announced it made a $72 billion US deal with the legacy studio. It’s a move that even has U.S. President Donald Trump weighing in.
The company did not disclose its plans for the $2.8 billion US termination fee received after losing the Warner Bros. movie studio, including HBO. Its earnings per share rose to $1.23 US in the first quarter from 66 cents per share a year ago.
Revenue climbed to $12.25 billion US, marking a 16 percent increase from the same period last year and slightly surpassing analyst expectations of $12.18 billion US.
Netflix, which previously viewed a Warner Bros. acquisition as a discretionary move, emphasized future growth opportunities.
The company highlighted its investments in expanding entertainment offerings through video podcasts and live events, such as the World Baseball Classic in Japan, to enhance user engagement. It aims to leverage technology for better user experiences and increased monetization, with advertising revenue on track to reach $3 billion US in 2026 — double the amount from the previous year.