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Key Highlights on Netflix’s Q1 Performance

• Netflix reported first-quarter revenue of $12.3 billion, a 16% year-over-year increase, slightly surpassing expectations.

• Second-quarter revenue guidance indicates a slowdown to approximately $12.6 billion, or 13% growth.

• Co-founder Reed Hastings will step down from the board in June following his transition from CEO in 2023.

• The company’s free cash flow increased to $5.1 billion, buoyed by a $2.8 billion cash receipt related to a terminated deal.

• Netflix aims to achieve about $3 billion in ad revenue this year, doubling from 2025 levels, with its advertiser count up 70% year-over-year.

In summary, while Netflix showcased solid revenue growth for Q1 2023, its outlook for the upcoming quarter presents a notable deceleration, contributing to share price declines post-earnings announcement. Hastings’ departure has been downplayed by management, emphasizing the company’s ongoing growth potential through its pricing power and burgeoning advertising business.