Netflix shares fell sharply on Friday after the streaming group issued a weaker-than-expected outlook and said chairman and co-founder Reed Hastings will step down from the board.
The stock fell by about 9% to 10% in early trading after Netflix forecast earnings per share for the current quarter below analysts’ expectations, and projected its slowest quarterly revenue growth in a year.
The news comes as Netflix seeks new ways to grow amid intensifying competition, and after a potentially transformative merger with Warner Bros Discovery fell through in February. Kathleen Brooks, research director at X-Trade Brokers (XTB), said, “This was unexpected news, and Hastings is seen as the DNA of the company.”
In a 14-page letter to shareholders, Netflix said Hastings, 65, will not stand for re-election at the annual meeting in June and will focus on philanthropy and other pursuits. Hastings co-founded Netflix 29 years ago and led its transformation from a DVDs-by-mail business into a global streaming giant, reshaping how audiences watch films and television.
“My real contribution at Netflix wasn’t a single decision,” Hastings wrote, but rather, “building a company that others could inherit and improve.”
Netflix is aiming to broaden its growth story beyond subscriptions, investing in advertising, live programming, sport and gaming, while also relying on price rises to boost revenue. The company said advertising revenue remains on track to reach $3 billion in 2026, roughly double the level a year earlier.
Co-chief executive Greg Peters said Netflix ended last year with more than 325 million paid members and is entertaining an audience approaching one billion people. “But even given that number, we still have plenty of room to grow into our addressable market,” he said.
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