Netflix brought in more revenue than Wall Street expected in the first three months of 2026, and its viewers watched more than ever before. The company shared these results on April 16. On the same day, Netflix co-founder Reed Hastings stepped down. But Netflix also said it expects less money in the second quarter than analysts predicted, and that news sent the stock price down after regular trading hours. Bloomberg

A big reason for the engagement record was Japan, where Netflix shows broke viewing records in early 2026, according to the company's letter to shareholders. Netflix IR Netflix measures engagement using a report it publishes twice a year called "What We Watched," which it started in December 2023. Netflix Newsroom A "view" in this report means the total hours people watched a title divided by how long that title runs. Netflix formalized that definition in its second-half 2025 report, published January 20, 2026. Netflix Newsroom

On July 16, 2026, Netflix published its "What We Watched the First Half of 2026" report, continuing its twice-a-year schedule. Netflix Newsroom This report shows exactly how many people watched each individual show, which lets analysts check whether the big engagement numbers Netflix mentioned in April actually add up when you look at the details.

Netflix is also spending a lot more on making shows. In January 2026, Bloomberg reported that Netflix planned to increase spending on films and TV shows by 10% in 2026, on top of about $18 billion spent the year before. Bloomberg At the time, people worried that higher spending could squeeze Netflix's profits. The weaker Q2 forecast makes that concern more real, though Netflix has not directly blamed content spending for the lower forecast.

The biggest story behind these results is that Netflix is reportedly preparing a $72 billion offer to buy Warner Bros. Discovery, first reported by Bloomberg in January 2026. Bloomberg A deal that large would be one of the biggest media purchases ever. It would give Netflix a massive library of shows and movies plus production studios, meaning Netflix would own far more of what it shows instead of licensing it. Combined with the 10% spending increase and the softer Q2 forecast, Netflix looks like a company throwing money at both new content and a potential giant purchase all at once.

Hastings leaving on April 16 means no one from Netflix's original founding team remains in its executive ranks. The timing is complicated: the quarter delivered both a revenue beat and a disappointing forecast. His successors now run a company where the present looks strong, the near-term outlook is weaker than Wall Street wants, and the future may involve a deal that would change everything about Netflix's finances and competitive position.

The bigger question for anyone watching Netflix is whether the weak Q2 forecast is just a short-term blip or a sign that content spending is growing faster than the money coming in. The mid-year viewing report will be picked apart for clues about whether Japan's record viewership is part of a global trend or just a local surge. And the possible Warner Bros. Discovery deal will be the main story for the rest of the year. A $72 billion purchase would require Netflix to make big decisions about borrowing money, issuing shares, and balancing the content budget.

Netflix has not confirmed the Warner Bros. Discovery offer. The $72 billion figure comes from Bloomberg's reporting on preparations, not an official announcement. That distinction is important. Preparing an offer is not the same as making one, and deals this large can take months of regulatory review and financial planning before anything becomes official.