Netflix reported second-quarter revenue and profit on Thursday that were in line with analysts’ estimates as Wall Street closely monitors the company’s advertising and engagement metrics.
Netflix shares fell more than 8% in after-hours trading Thursday.
The streaming giant called engagement with its content “healthy”, saying live streaming was the biggest draw for members, who watched more than 97 billion hours of shared content in the first half of this year. Engagement rates have come under the spotlight following reports that viewership for Netflix series is falling after the first season.
However, the company said Thursday it would reduce the frequency of its “What We Watched” reports, which provide insight into interactions. Following the release of Thursday’s report, which provides viewership information for the first half of 2026, Netflix will move to publishing the report annually in the first quarter starting in 2027.
“The purpose of separating the release of the report from our earnings results is to focus on our core financial measures of revenue and operating profit,” the letter to shareholders said.
Here are Netflix’s results for the period ended June 30, compared with estimates from analysts surveyed by LSEG:
- Earnings per share: 80 cents vs. 79 cents estimated
- Income: $12.56 billion vs. estimated $12.59 billion
Netflix reported revenue of $12.56 billion, up 13% from last year and just shy of analysts’ expectations. The growth was due to increases in membership, prices and increased advertising revenue.
Earlier this year, Netflix raised subscription prices on all of its streaming plans. The company said Thursday that the results of the price increase were in line with previous changes and expectations.
Net income for the second quarter was $3.40 billion, or 80 cents per share, compared with $3.13 billion, or 72 cents per share, in the same period last year.
Netflix expects third-quarter revenue to grow 12% and put its 2026 guidance in line with earlier forecasts. The company said it was narrowing its 2026 revenue guidance range to $51 billion to $51.4 billion for the full fiscal year, down from a previous forecast of $50.7 billion to $51.7 billion.
Advertising remains key to Netflix’s business and investors as a source of media revenue as streaming subscriber growth has slowed.
The company said Thursday it still expects to roughly double its annualized advertising revenue to $3 billion.
Netflix added that it is in “advanced stages” of talks with advertisers in the US as part of the Upfront talks, expecting commitments to be finalized in the coming weeks. Live sports such as the Women’s World Cup, other NFL games, MLB and WWE events have brought steady demand to the company.
Overall, Netflix named live events some of its top programming this year, with live events accounting for six of the top 10 new member sign-up days over the past five years.
However, Netflix noted that while live streaming accounts for more than 5% of content spend, it accounts for about 1% of viewing hours.
Netflix noted that it only entered live-action programming in 2023, after years of growing solely through original content and licensed series and films. The company has been involved in sports rights ever since.
In a letter to shareholders on Thursday, Netflix said the “entertainment industry remains dynamic and competitive.”
Late last year, Netflix made a bet on Warner Bros.’ film and streaming business. Discovery before ultimately backing out of the deal. The proposed deal has sparked a flurry of speculation about whether Netflix is now interested in buying other assets.
Netflix said Thursday that its approach has not changed as it “will prioritize reinvesting in the business, both organically and through selective mergers and acquisitions, while maintaining a healthy balance sheet and ample liquidity.” Before making a bid for WBD’s assets, Netflix had long described itself as the developer rather than the buyer.