Netflix released second-quarter results that largely aligned with Wall Street expectations, reporting $12.56 billion in revenue with year-over-year growth of 13%. The results reflected gains from membership expansion, subscription price increases implemented earlier in the year, and growing advertising revenue. Net income reached $3.40 billion, or 80 cents per share, compared to $3.13 billion or 72 cents per share in the same quarter the prior year.
Despite meeting revenue targets, Netflix stock fell more than 7% in trading Friday as investors reacted negatively to the company’s forward guidance. The streaming service projected third-quarter revenue growth of 12% and narrowed its full-year revenue forecast to a range of $51 billion to $51.4 billion. These projections were characterized as consistent with earlier outlooks, but market reaction suggested disappointment with the growth trajectory.
Engagement metrics emerged as a key topic during the company’s earnings call, with analysts focusing on viewership trends and content consumption patterns. Netflix reported that members watched more than 97 billion hours of content during the first half of the year, which executives described as demonstrating healthy engagement. The company addressed earlier reports suggesting viewership drops after first seasons, with co-CEO Ted Sarandos stating there was no material change in second-season viewership compared to opening seasons.
In a notable shift regarding transparency, Netflix announced it would reduce the frequency of its “What We Watched” engagement reports. After publishing a mid-year report covering the first half of 2026, the company will transition to an annual publication schedule beginning in 2027, aligning the report with first-quarter earnings releases. The company indicated this change aimed to direct investor focus toward financial metrics including revenue and operating profit rather than engagement data.
Looking ahead, Netflix emphasized the role of live programming in its growth strategy, noting that live events contributed to six of the top ten new member acquisition days over the past five years. The company projected ad revenue would roughly double year over year to $3 billion, supported by live sports offerings and ongoing advertising upfront negotiations expected to conclude in the coming weeks. Executives also discussed potential expansion into free ad-supported tiers in select markets, though they indicated no near-term plans for such a launch.
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