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 have 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.
Here 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 progress, pricing and elevated advert income.
Earlier this yr, Netflix raised its subscription costs throughout all its streaming plans. The corporate mentioned Thursday the outcomes of these value hikes have been per prior adjustments and expectations.
Internet earnings 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 referred to as its 2026 outlook per earlier forecasts. The corporate mentioned it was narrowing its 2026 forecast income vary to $51 billion to $51.4 billion for the total fiscal yr, from earlier steering of between $50.7 billion to $51.7 billion.
Engagement focus
Questions on engagement have been prime of thoughts for analysts throughout Thursday’s earnings name.
The streaming large referred to as engagement with its content material “wholesome,” saying reside occasions have been a prime draw for members, who watched greater than 97 billion hours of whole content material within the first half of this yr. The engagement metric has come into focus after reviews that viewership for Netflix collection 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 usually are not created equal,” co-CEO Greg Peters mentioned through the name.
Co-CEO Ted Sarandos additionally mentioned Thursday that there is not “any materials change” in second season viewership of collection versus the primary season, following an earlier report that mentioned there was a drop-off. “Our season two fall off has truly barely improved this yr relative to final yr, so no adjustments in launch methods,” Sarandos mentioned on the decision.
But, on Thursday, the corporate mentioned it will in the reduction of on the frequency of its “What We Watched” reviews, which offer an image of engagement. Following the discharge of Thursday’s report – which provides info 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 mentioned its purpose in separating out when “What We Watched” is revealed from its earnings outcomes is to maintain the give attention to monetary metrics like income and working revenue.
Normally, Netflix referred to as out reside occasions as a few of its prime programming this yr, with reside occasions accounting for six of the highest 10 new member sign-up days over the previous 5 years.
Nonetheless, Netflix famous that whereas reside 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 reside programming in 2023, following years of progress solely on authentic content material and licensed TV collection and films. Since then, the corporate has been bulking up on sports activities rights.
Dwell sports activities usually pull within the greatest promoting {dollars} — one thing that has turn out to be vital to driving income progress for Netflix, notably as streaming subscriber progress has slowed.
On Thursday, the corporate mentioned it nonetheless expects to roughly double its advert income yr over yr to $3 billion.
Netflix added that it’s in “superior levels” 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. Dwell 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 in recent times as a brand new income driver. On Thursday, Peters mentioned it was usually fascinated with its pricing and plan selections, and find out how to increase choices.
One possibility could possibly be a free tier, which Peters mentioned “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 adverts enterprise in any candidate nation for such an providing is clearly an vital enabling issue to make these economics work,” Peters mentioned. “In order that’s all to say that free is one thing that we’ll proceed to contemplate, however we have now no near-term plans to launch one thing.”
Such adjustments 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 concerned about shopping for different belongings.
Netflix mentioned in its earnings report its method hasn’t modified as it’ll “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 belongings, Netflix had lengthy referred to as itself a builder, not a purchaser.
On the decision, Netflix executives mentioned they would not touch upon hypothesis, however reiterated their previous mantra.
“As Ted mentioned, we’re primarily builders, not patrons,” CFO Spencer Neumann mentioned. “Now we have a very excessive bar.”
