Netflix (NFLX) Q2 2026 Earnings

Netflix It reported second-quarter revenue and earnings that were roughly in line with analyst estimates on Thursday as Wall Street closely watches the company’s advertising and engagement metrics.

Netflix stock fell more than 7% in Friday trading as investors once again appeared disappointed about the company’s earnings outlook.

Here’s how Netflix performed for the period ending June 30 compared to estimates from analysts polled by LSEG:

• EPS: 80 cents versus 79 cents estimated
• profit: $12.56 billion versus the estimated $12.59 billion

Netflix reported revenue of $12.56 billion, up 13% year over year and slightly below analysts’ expectations. This increase is due to membership growth, pricing and increased advertising revenue.

Earlier this year, Netflix raised its subscription prices across all of its streaming plans. The company said on Thursday that the results of those price increases were consistent with previous changes and expectations.

Net income for the second quarter was $3.40 billion, or 80 cents per share, compared to $3.13 billion, or 72 cents per share, in the same period last year.

Netflix expects third-quarter revenue to grow 12% and described its 2026 outlook as consistent with previous projections. The company said it has narrowed its expected 2026 revenue to $51 billion to $51.4 billion for the full fiscal year, from previous guidance of $50.7 billion to $51.7 billion.

Questions about sharing were at the forefront of analysts’ minds during Thursday’s earnings call.

The live streaming giant described engagement with its content as “healthy”, saying live events were a big draw for members, who watched more than 97 billion hours of total content in the first half of this year. The engagement metric came into focus after reports that viewership for Netflix series declined after the first season.

“I’ll start by saying that there is no linear relationship between hours watched, revenue and profits, because all hours are not created equal,” co-CEO Greg Peters said during the call.

Co-CEO Ted Sarandos also said Thursday that there was “no material change” in viewership for the series’ second season compared to the first season, after an earlier report said there was a decline. “Our second season has improved slightly this year compared to last year, so there are no changes in release strategies,” Sarandos said by phone.

However, the company said Thursday that it would reduce the frequency of “what we saw” reports, which provide a picture of the interaction. After releasing Thursday’s report – which provides viewership information for the first half of 2026 – Netflix will switch to publishing the report annually in the first quarter starting in 2027.

The company said its goal in separating the publication time of “What We Saw” from its earnings results is to maintain focus on financial metrics such as revenue and operating profit.

Overall, Netflix considered live events some of its best programming this year, with live events accounting for six of the top 10 days for new member signups over the past five years.

However, Netflix noted that while streaming accounts for more than 5% of its content spending, it only makes up about 1% of viewing hours.

Netflix noted that it is getting into streaming-only programming in 2023, after years of growing solely on original content, TV series and licensed movies. Since then, the company has increased the size of its sports rights.

Live sports often make the most money from advertising — something that has become important to driving Netflix’s revenue growth, especially as streaming subscriber growth slows.

The company said Thursday that it still expects its advertising revenue to nearly double year over year to $3 billion.

Netflix added that it is in the “advanced stages” of discussions with US advertisers as part of its pre-negotiations, with commitments expected to close in the coming weeks. Live sports, such as the Women’s World Cup, more NFL games, and MLB and WWE events, have attracted strong demand for the company.

The company has introduced its cheaper, ad-supported plan to customers in recent years as a new revenue driver. Peters said Thursday that she was often thinking about pricing and plan options and how to expand offerings.

One option could be the free tier, which Peters said “may make sense in some markets, but we have to think about unbundling the paid tiers.”

“It is also worth noting that the presence of an effective tiered advertising business in any candidate country for such an offering is an important enabler to make these economic drivers successful,” Peters said. “So that’s all to say that free service is something we’ll continue to look at, but we have no near-term plans to launch something.”

These changes came in response to increasing competition across the media landscape. In its shareholder letter on Thursday, Netflix noted that “the entertainment industry remains dynamic and competitive.”

Late last year, Netflix made a play for Warner Bros.’ film and streaming business. Discovery before eventually pulling out of the deal. The proposed deal has sparked a wave of speculation about whether Netflix is ​​now interested in purchasing other assets.

Netflix said in its earnings report that its approach has not changed because it “will prioritize reinvesting in the business, both organically and through selective mergers and acquisitions, while maintaining a healthy balance sheet and ample liquidity.” Before its bid to buy WBD assets, Netflix had long called itself a “builder,” not a “buyer.”

During the call, Netflix executives said they would not comment on speculation, but repeated their previous slogan.

“As Ted said, we are primarily builders, not buyers,” said CFO Spencer Newman. “We have a really high standard.”