Reed Hastings, who helped launched Netflix from a fledgling DVD mail-order business into a global streaming juggernaut, plans to exit the company after nearly three decades.
Hastings will leave the company he co-founded to focus on philanthropy and other efforts, the streaming company announced said Thursday.
Hastings, who serves as chairman of the Los Gatos company’s board, told Netflix he will not stand for reelection when his term expires in June, Netflix said in a letter to shareholders timed to its fiscal first-quarter earnings.
He said the commitment of Netflix Co-Chief Executives Ted Sarandos and Greg Peters was “so strong that I can now focus on new things.”
Peters described Hastings, 65, as the company’s “biggest champion,” and that he “is a part of our DNA.”
Sarandos called Hastings a “true history maker,” saying in a statement that Hastings’ “selfless, disciplined leadership style” will continue to shape Netflix’s path ahead.
Hastings’ exit was not unexpected as his role in the company diminished after he stepped aside as co-chief executive of Netflix in 2023.
During his tenure, Hastings oversaw the substantial growth of the streaming colossus. Today, Netflix has a market cap of about $455 billion, more than double that of the Walt Disney Co.
“My real contribution at Netflix wasn’t a single decision; it was a focus on member joy, building a culture that others could inherit and improve, and building a company that could be both beloved by members and wildly successful for generations to come,” Hastings said in a statement.
For the first quarter of 2026, Netflix reported nearly $12.3 billion of revenue, up 16% compared to the same time period a year ago. Operating income grew 18% to $3.9 billion for the three-month ending March 31.
Both figures were ahead of the company’s guidance, a feat the streamer attributed to slightly higher than expected subscription revenue.
The company reported net income of $5.3 billion, up more than 80% compared to the $2.9 billion it recorded during the same period last year. Earnings per share was $1.23, up from 66 cents last year.
Netflix said it continues to expect 2026 revenue ranging from $50.7 billion to $51.7 billion, with an operating margin of 31.5%.
The earnings release and the Hastings announcement came after markets closed.
Netflix shares closed at $107.79, virtually unchanged. After hours, the shares dropped more than 8% to $98.26. They have climbed about 18% this year.
The Los Gatos-based company had previously secured an $82.7-billion deal to buy Warner Bros. studios and streaming services in December but it withdrew from the bidding war in late February after Paramount Skydance offered $31 a share. As part of the switch, Netflix was paid a $2.8-billion termination fee.
“Warner Bros. would have been a nice accelerant for our strategy, but only at the right price,” Netflix said in its investor letter. “We have multiple ways to achieve our goals (including producing, licensing, and partnering) and we’re constantly seeking to allocate our resources to the most attractive opportunities to maximize the value we are delivering to our members.”
Before Reed Hastings revolutionized the global entertainment business, he sold Rainbow vacuum cleaners door-to-door during his gap year between high school and Bowdoin College, where he earned his bachelor’s degree in mathematics.
During his sales pitch, Reed would first clean a homeowner’s carpet with their vacuum and then demonstrate how to clean using a Rainbow. The job helped hone his ability to understand customers, a core foundation of Netflix’s user-driven, candor-obsessed culture.
After Bowdoin and before he earned his master’s degree in computer science at Stanford, Hastings served in the Peace Corps (he also did a stint in the Marines) teaching high school math in Swaziland (now Eswatini).
“Once you have hitchhiked across Africa with ten bucks in your pocket, starting a business doesn’t seem too intimidating,” he told Time magazine.
While those experiences helped shape Hasting’s business sense, it was a late fee for a video that became the catalyst for launching Netflix, upending the way viewers consumed content and disrupting how Hollywood does business.
As the story goes, Hastings had misplaced a VHS tape of “Apollo 13” racking up a hefty $40 charge.
It was 1997 and his company Pure Software had just been acquired. It dawned on him that a gym membership offered a better business model, than the average video store — where you paid a set fee for the month and you could work out as much or as little as you liked. He thought, why not apply that to the movie rental business?
Netflix, began in Scotts Valley, Calif., as a mail-order business. Customers paid a tiered monthly fee to rent DVDs online which were delivered by mail.
The business exploded racking up millions of customers as it jettisoned the post office to an internet-based business. As the business accelerated across the world it also expanded, creating original content such as award-winning blockbusters such as “Stranger Things” and “House of Cards.”
The company’s innovation extended internally too. Hastings became known for implementing a unique and controversial culture of radical transparency, where employee evaluations are brutally candid and average performances can be grounds for termination.
The concept was a central theme of his 2020 book “No Rules Rules: Netflix and the Culture of Reinvention,” written with business professor Erin Meyer.
Times staff writers Meg James and Wendy Lee contributed to this report.
