The Netflix emblem is seen on the roof of an workplace constructing in Los Angeles, California, on April 16, 2026.
Michael Yanow | Nurphoto | Getty Photos
Netflix reported second-quarter income and earnings that had been roughly in step with analyst estimates on Thursday as Wall Road is holding a detailed eye on the corporate’s promoting and engagement metrics.
Netflix inventory fell greater than 8% in after-hours buying and selling Thursday as traders appeared upset as soon as once more within the firm’s earnings forecast.
This is how Netflix carried out for the interval ended June 30 in contrast with estimates from analysts polled by LSEG:
- Earnings per share: 80 cents vs. 79 cents estimated
- Income: $12.56 billion vs. $12.59 billion estimated
Netflix reported $12.56 billion in income, up 13% yr over yr and simply barely lacking analyst expectations. The rise was attributed to membership development, pricing and elevated advert income.
Earlier this yr, Netflix raised its subscription costs throughout all its streaming plans. The corporate stated Thursday the outcomes of these value hikes had been per prior modifications and expectations.
Internet revenue for the second quarter was $3.40 billion, or 80 cents per share, in contrast with $3.13 billion, or 72 cents a share in the identical interval final yr.
Netflix expects third-quarter income to develop 12% and known as its 2026 outlook per earlier forecasts. The corporate stated it was narrowing its 2026 forecast income vary to $51 billion to $51.4 billion for the complete fiscal yr, from earlier steerage of between $50.7 billion to $51.7 billion.
Engagement focus
Questions on engagement had been high of thoughts for analysts throughout Thursday’s earnings name.
The streaming big known as engagement with its content material “wholesome,” saying dwell occasions had been a high draw for members, who watched greater than 97 billion hours of complete content material within the first half of this yr. The engagement metric has come into focus after stories that viewership for Netflix sequence drops following the primary season.
“I am going to begin by saying there’s not a linear relationship between viewing hours and income and revenue, as a result of all hours are usually not created equal,” co-CEO Greg Peters stated in the course of the name.
Co-CEO Ted Sarandos additionally stated Thursday that there is not “any materials change” in second season viewership of sequence versus the primary season, following an earlier report that stated there was a drop-off. “Our season two fall off has really barely improved this yr relative to final yr, so no modifications in launch methods,” Sarandos stated on the decision.
But, on Thursday, the corporate stated it will reduce on the frequency of its “What We Watched” stories, which offer an image of engagement. Following the discharge of Thursday’s report – which provides data on viewership for the primary half of 2026 – Netflix will shift to publishing the report yearly within the first quarter starting in 2027.
The corporate stated its purpose in separating out when “What We Watched” is revealed from its earnings outcomes is to maintain the concentrate on monetary metrics like income and working revenue.
On the whole, Netflix known as out dwell occasions as a few of its high programming this yr, with dwell occasions accounting for six of the highest 10 new member sign-up days over the previous 5 years.
Nonetheless, Netflix famous that whereas dwell programming accounts for greater than 5% of its content material spending, it makes up about 1% of viewing hours.
Netflix famous that it solely received into dwell programming in 2023, following years of development solely on unique content material and licensed TV sequence and films. Since then, the corporate has been bulking up on sports activities rights.
Stay sports activities usually pull within the largest promoting {dollars} — one thing that has turn out to be necessary to driving income development for Netflix, notably as streaming subscriber development has slowed.
On Thursday, the corporate stated it nonetheless expects to roughly double its advert income yr over yr to $3 billion.
Netflix added that it’s in “superior phases” of discussions with advertisers within the U.S. as a part of its Upfront negotiations, with the expectation that commitments will shut within the coming weeks. Stay sports activities, such because the Girls’s World Cup, extra NFL video games, MLB occasions and WWE, have attracted strong demand for the corporate.
The corporate launched its cheaper, ad-supported plan to prospects lately as a brand new income driver. On Thursday, Peters stated it was usually eager about its pricing and plan decisions, and find out how to increase choices.
One choice could possibly be a free tier, which Peters stated “may make sense in some markets, however we have now to be considerate about cannibalization of paid tiers.”
“It is most likely additionally price noting that having an efficient scaled advertisements enterprise in any candidate nation for such an providing is clearly an necessary enabling issue to make these economics work,” Peters stated. “In order that’s all to say that free is one thing that we will proceed to think about, however we have now no near-term plans to launch one thing.”
Such modifications have are available response to elevated competitors throughout the media panorama. In Thursday’s shareholder letter, Netflix famous that the “leisure business stays dynamic and aggressive.”
Late final yr, Netflix made a play for Warner Bros. Discovery‘s movie and streaming enterprise earlier than in the end strolling away from the deal. The proposed deal set off a flurry of hypothesis about if Netflix is now curious about shopping for different property.
Netflix stated in its earnings report its method hasn’t modified as it should “prioritize reinvestment within the enterprise, each organically and thru selective M&A, whereas sustaining a well being stability sheet and ample liquidity.” Previous to its bid for WBD’s property, Netflix had lengthy known as itself a builder, not a purchaser.
On the decision, Netflix executives stated they would not touch upon hypothesis, however reiterated their previous mantra.
“As Ted stated, we’re primarily builders, not consumers,” CFO Spencer Neumann stated. “We’ve a extremely excessive bar.”