AI Takeaway
Netflix delivered a strong Q1 2026 with revenue up 16.2% YoY to $12.25B, net income surging 82.8% to $5.28B, and operating cash flow nearly doubling to $5.29B, reflecting robust subscriber monetization and expanding margins.
Revenue
$12.25B
++16.19% YoY
EPS (Basic)
$1.25
++83.82% YoY
Operating Income
$3.96B
++18.23% YoY
Filed · Analysis updated · Source: SEC EDGAR 10-Q filing
Revenue grew 16.2% YoY to $12.25B in Q1 2026 (from $10.54B in Q1 2025), indicating continued strength in Netflix's paid membership base and average revenue per user, likely supported by the advertising tier and password-sharing crackdown initiatives.
Source: Source: 10-Q Income Statement
Operating income rose 18.2% YoY to $3.96B, pushing the operating margin to 32.3% from 31.7% in the prior year period — a 56 basis point improvement — demonstrating operating leverage as revenue growth outpaced cost growth.
Source: Source: 10-Q Income Statement
Net income surged 82.8% YoY to $5.28B, significantly outpacing revenue growth, which suggests meaningful non-operating gains (e.g., favorable foreign exchange, investment income, or tax benefits) in addition to operational improvements.
Source: Source: 10-Q Income Statement
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Upgrade to unlockCost of revenue grew 11.9% YoY to $5.89B, and R&D expenses increased 16.6% YoY to $960M, reflecting ongoing investment in original content and technology. Sustained cost escalation could compress margins if revenue growth decelerates.
Source: Source: 10-Q Income Statement
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Upgrade to unlockReported EPS of $0.70 versus the $0.78 analyst consensus — a -10.2% miss for Q1 FY2026.
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Revenue | $12.25B | $10.54B | +16.19% |
Cost of Revenue | $5.89B | $5.26B | +11.88% |
Operating Income | $3.96B | $3.35B | +18.23% |
Net Income | $5.28B | $2.89B | +82.77% |
EPS (Basic) | $1.25 | $0.68 | +83.82% |
EPS (Diluted) | $1.23 | $0.66 | +86.36% |
R&D Expense | $959.7M | $822.82M | +16.63% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Total Assets | $61.02B | $52.09B | +17.14% |
Current Assets | $17.07B | $11.7B | +45.94% |
Total Liabilities | $29.89B | $28.06B | +6.52% |
Current Liabilities | $12.13B | $9.72B | +24.83% |
Stockholders' Equity | $31.13B | $24.03B | +29.54% |
Cash & Equivalents | $12.26B | $7.2B | +70.28% |
Long-Term Debt | $13.36B | $14.01B | -4.64% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Cash Flow | $5.29B | $2.79B | +89.67% |
Investing Cash Flow | $-781.87M | $485.66M | -260.99% |
Financing Cash Flow | $-1.23B | $-4.03B | +69.45% |
Share Buybacks | $1.27B | $3.54B | -64.07% |
D&A | $98.58M | $80.07M | +23.12% |
| Metric | Current | Previous | YoY Change |
|---|---|---|---|
Operating Margin | 32.3% | 31.7% | +0.56% |
Net Margin | 43.1% | — | — |
ROE | 17.0% | — | — |
ROA | 8.7% | — | — |
Current Ratio | $1.407 | — | — |
Debt to Equity | $0.96 | — | — |
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Netflix had an outstanding Q1 2026, with revenue growing 16.2% YoY to $12.25B and net income surging 82.8% to $5.28B. Operating cash flow nearly doubled to $5.29B, and the operating margin expanded to 32.3%, reflecting strong monetization and cost discipline.
The standout takeaways from Netflix's Q1 2026 report are: revenue of $12.25B (+16.2%), a net income of $5.28B that grew nearly 3x faster than revenue, and cash balances jumping 70.3% YoY to $12.26B. The company also reduced long-term debt by 4.6% while growing stockholders' equity by 29.5%, signaling a strengthening balance sheet.
Based on the filing data, Netflix reported diluted EPS of $1.23, up 86.4% from $0.66 in Q1 2025, and net income of $5.28B. Whether this beat Wall Street consensus estimates would require comparison to analyst forecasts, but the results represent significant YoY improvement across all major metrics.
Netflix's financial health appears strong: it holds $12.26B in cash, has a current ratio of 1.41, and generated $5.29B in operating cash flow in Q1 2026. Long-term debt of $13.36B is manageable relative to its $31.13B in stockholders' equity (debt-to-equity of 0.96), and the company reduced debt by 4.6% YoY.
Key risks inferred from Netflix's Q1 2026 financials include competitive pressure in streaming, foreign exchange exposure (given the large gap between net income and operating income growth), and ongoing content cost inflation with R&D up 16.6% YoY to $960M. Execution of the advertising tier and maintaining subscriber growth amid intense competition remain important watch items.