Netflix posted first-quarter revenue of $12.25 billion, up 16% year over year and largely matching expectations, with earnings per share of $1.23 beating consensus estimates.

The stock fell more than 9% in after-hours trading as investors reassessed guidance and outlook after the results.

Netflix is not detailing how it will use the $2.8 billion termination fee it received after Warner Bros. Discovery deal collapsed, a bid that ultimately went to Paramount Skydance.

Founder Reed Hastings will remain on the board through June but will step down afterward, signaling a leadership transition to Greg Peters and Ted Sarandos.

The company rolled out Playground, a games app for kids, added Jackbox party games, and is planning a mobile app revamp focused on vertical video by month’s end.

Netflix reiterates its mission to entertain the world while expanding into advertising as a new revenue pillar, with ad customers up 70% year over year and projected ad revenue around $3 billion in 2026.

Beyond streaming, Netflix is pursuing ventures like curated party games, video podcasts, and live sports deals to broaden its footprint.

Hastings plans to shift focus toward philanthropy and other ventures, including a substantial investment in Powder Mountain, a Utah ski resort redevelopment project.

Hastings has been involved in real estate and political contributions, building a track record in philanthropy and public affairs.

The leadership transition is tied to Netflix’s governance story as the company navigates the post-merger landscape and evolving strategy.

Hastings will step down from the Netflix board in June, with the company emphasizing leadership development and a long-term, member-centric culture.

Netflix highlighted that its quarters were solid despite the failed Warner Bros. bid and noted ongoing strategy to grow subscriptions, ad revenue, and content development under new leadership.