Netflix reported second-quarter results that largely met analyst expectations, with revenue of $12.56 billion representing 13% year-over-year growth and net income of $3.40 billion, or 80 cents per share. The company attributed revenue increases to membership expansion, subscription price adjustments implemented earlier in the year, and growing advertising revenue. However, the stock declined more than 7% in subsequent trading as investors reacted negatively to the company’s earnings forecast.
The streaming service provided updated guidance for the remainder of 2026, projecting third-quarter revenue growth of 12% and narrowing its full-year revenue forecast to a range of $51 billion to $51.4 billion, compared with prior guidance of $50.7 billion to $51.7 billion. During an earnings call, executives addressed analyst questions about viewer engagement metrics, with co-CEOs stating that content engagement remained healthy and that live events drove significant member acquisition. The company reported that viewers consumed more than 97 billion hours of content during the first half of the year and noted that live programming accounts for six of the top 10 member sign-up days over the past five years.
Netflix announced a significant change to its public reporting practices, indicating it would reduce the frequency of its “What We Watched” engagement reports. Beginning in 2027, these reports will be published annually in the first quarter rather than released alongside earnings results. The company stated this shift aims to emphasize financial performance metrics including revenue and operating profit over engagement data.
The company reiterated its focus on live sports programming as a revenue driver, expecting to roughly double advertising revenue year over year to $3 billion. Netflix noted it is in advanced-stage discussions with advertisers regarding annual upfront negotiations and cited live sports offerings including the Women’s World Cup, additional NFL games, MLB events, and WWE as attracting strong advertiser demand. Executives also discussed potential pricing strategies, including the possibility of introducing a free tier in select markets, though they stated no near-term plans exist for such a launch.
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