The Netflix logo is seen on the roof of an office building in Los Angeles, California, on April 16, 2026.
Michael Yanow | Nurphoto Getty Images
Netflix reported second-quarter revenue and profit that roughly matched analyst estimates on Thursday as Wall Street kept a close eye on the company’s advertising and engagement metrics.
Netflix stock fell more than 8% in after-hours trading Thursday.
The giant called engagement with its content “lively,” and said live events are a top draw for members, who watched more than 97 billion hours of total content in the first half of this year. The engagement metric came into focus after reports that viewership for the Netflix series was dropping after the first season.
On Thursday, the company said it would reduce the frequency of its “What We Watched” reports, which provide an engagement picture. After the release of Thursday’s report – which provides information about viewers in the first quarter of 2026 – Netflix will switch to publishing the report annually in the first quarter starting in 2027.
The company said its goal in separating “What We Watched” from its earnings results is to keep the focus on financial metrics like revenue and operating profit.
Questions about the deal were uppermost in analysts’ minds during a call Thursday.
“I’ll start by saying there is no relationship between watch hours and revenue and profit, because all hours are not created equal,” CEO Greg Peters said during the call.
Co-CEO Ted Sarandos also said Thursday that there is no “tangible change” in the look of the series’ second season compared to the first season, following an earlier report that there had been cancellations. “Our second season is slightly improved this year compared to last year, so there are no changes in the release strategy,” Sarandos said on the phone.
Here’s how Netflix performed in the period ended June 30 compared to estimates from analysts polled by LSEG:
- Earnings per share: 80 cents vs. 79 cents average
- Net worth: $12.56 billion versus $12.59 billion estimated
Netflix reported revenue of $12.56 billion, up 13% year over year and slightly missing analyst expectations. This increase was due to growth in membership, pricing and increased advertising revenue.
Earlier this year, Netflix raised its subscription prices for all of its streaming programs. The company said on Thursday that the results of these price increases are 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 called its 2026 outlook in line with previous forecasts. The company said it is lowering its 2026 revenue forecast range to $51.4 billion for the full fiscal year, from a previous guidance of between $50.7 billion and $51.7 billion.
Advertising remains key to Netflix’s business and investors as it has been a revenue driver across media even as streaming subscriber growth has slowed.
On Thursday, the company said it still expects to double its year-over-year ad revenue to $3 billion.
Netflix added that it is in the “advanced stages” of discussions with US advertisers as part of its Advanced Negotiations, with a commitment expected to close in the coming weeks. Live sports, such as the Women’s World Cup, many NFL games, MLB and WWE events, have attracted strong demand for the company.
Overall, Netflix has named live events as some of its top shows this year, with live events accounting for six out of 10 new member sign-ups over the past five years.
However, Netflix noted that while live shows make up more than 5% of your content, they make up about 1% of viewing hours.
Netflix noted that it only entered live programming in 2023, following years of growth in original content and licensed TV series and movies. Since then, the company has been collecting sports rights.
In Thursday’s letter to shareholders, Netflix noted that “the entertainment industry remains dynamic and competitive.”
Late last year, Netflix acquired the film and streaming business of Warner Bros. Discovery before finally walking away from the deal. The proposed deal sparked speculation that Netflix is now interested in buying other assets.
Netflix said Thursday that its strategy has not changed as it will “prioritize reinvestment in the business, both organically and through selective M&A, while maintaining a healthy balance sheet and adequate liquidity.” Before its bid for WBD assets, Netflix had been calling itself a builder, not a consumer.
