Netflix reported second-quarter revenue of $12.56 billion on Thursday, up 13% year-on-year, narrowly missing analyst forecasts of $12.59 billion compiled by the London Stock Exchange Group. Net income for the quarter reached $3.40 billion, or 80 cents per share, compared with $3.13 billion, or 72 cents per share, in the same period last year. Earnings per share came in at 80 cents, slightly ahead of the 79-cent estimate.
Despite broadly in-line results, the company’s stock fell more than 8% in after-hours trading, with investors appearing disappointed by the earnings outlook.
Netflix narrowed its full-year 2026 revenue guidance to between $51 billion and $51.4 billion, tightening a range that previously ran from $50.7 billion to $51.7 billion. The company forecast 12% revenue growth in the third quarter and said its broader 2026 expectations remain in line with prior guidance. It also said price increases applied earlier this year to all streaming tiers had performed in line with previous changes and expectations.
Engagement was a central topic on the earnings call. Netflix said subscribers watched more than 97 billion hours of content in the first half of the year, and described overall engagement as “good.” Co-CEO Greg Peters cautioned against reading too much into viewing hours alone. “There is no linear relationship between hours and revenue and profit, because hours are not equal,” he said.
Co-CEO Ted Sarandos pushed back on reports of declining second-season viewership, saying there had been “no material change” relative to first-season viewing. “Our season two drop-off has actually improved slightly this year versus last year, so no changes have been made to release strategies,” he added.
The company also announced it would reduce the frequency of its “What We Watched” transparency report. After Thursday’s report, which covers the first half of 2026, Netflix will publish the document annually in the first quarter of each year beginning in 2027. It said the change was aimed at shifting focus toward financial metrics such as revenue and operating profit.
Live programming emerged as a subscriber acquisition tool, accounting for six of the ten best days for new sign-ups over the past five years. Netflix noted it entered live programming in 2023 and has since expanded its sports broadcast rights. Live sport, in particular, commands higher advertising rates, which matters as ad revenue becomes a more material driver of growth. The company said it still expects to nearly double its advertising revenue year-on-year to approximately $3 billion. It did note, however, that live programming accounts for more than 5% of content spending while representing only around 1% of viewing hours.
