Streaming giant Netflix Inc. (NASDAQ:NFLX) beat first-quarter revenue and earnings estimates last week but signaled a softer near-term outlook. At the same time, an analyst note highlighted a planned mobile vertical video rollout to boost user engagement.

Earnings Beat Estimates

The company reported first-quarter revenue of $12.25 billion last week, beating analyst estimates of $12.18 billion, according to Benzinga Pro.

The company reported earnings of $1.23 per share for the quarter, beating estimates of 76 cents per share.

Netflix guided for second-quarter revenue of $12.57 billion versus estimates of $12.63 billion. The company anticipates second-quarter earnings of 78 cents per share versus estimates of 84 cents per share.

The company also announced that chairman and co-founder Reed Hastings will not stand for re-election to the board when his term expires in June.

Hastings previously stepped down as co-CEO in 2023 and has since served as chairman. His departure leaves co-CEOs Ted Sarandos and Greg Peters fully in charge.

Mobile Strategy Push: Vertical Video Rollout

Apart from this, Netflix is preparing to roll out a vertical video feed on mobile later this month as it looks to deepen user engagement beyond the living room, according to a recent note from JPMorgan.

The firm sees the move as a way for Netflix to capture "snackable moments" and increase interaction with its longer-form content. Despite accounting for roughly 5% of global TV view share, Netflix has focused primarily on television viewing, leaving mobile engagement relatively underpenetrated.

Strategy Targets Younger Audiences

JPMorgan expects the vertical video product to feature clips from original films and TV series, alongside newer formats such as video podcasts and creator-driven content. The initiative could also enhance content discovery and personalization, supported by features like scene clipping.

The analysts noted that social platforms already command about 18% of daily digital media time among U.S. adults, or roughly 1.5 hours per day. Mobile video consumption remains significant but trails connected TV usage, suggesting room for growth.

Advertising and Content Discovery Upside

Beyond engagement, vertical video could create longer-term advertising opportunities and boost awareness of newer formats, including live events, sports and games.

The firm maintains an "Overweight" rating on Netflix with a $118 price forecast, citing strong global scale, with more than 325 million subscribers, and continued growth in revenue and profitability driven by expanding content and an ad-supported tier.

NFLX Price Action: Netflix shares were up 0.73% at $93.26 at the time of publication on Wednesday, according to Benzinga Pro data.

Photo via Shutterstock