Netflix reported its second-quarter earnings on July 16, 2026, revealing revenue of $12.56 billion, which represents a 13% increase year-over-year but slightly missed analyst expectations. The company’s net income for the quarter was $3.40 billion, or 80 cents per share, compared to $3.13 billion, or 72 cents per share, in the same period last year.
Following the earnings report, Netflix's stock fell over 8% in after-hours trading as investors reacted to the company's narrowed guidance for 2026, now projecting revenue between $51 billion and $51.4 billion, down from a previous range of $50.7 billion to $51.7 billion. Analysts raised concerns about engagement metrics, particularly in light of Netflix's plans to reduce the frequency of its engagement reports, shifting to an annual publication starting in 2027.
During the earnings call, co-CEO Greg Peters noted that there is not a direct correlation between viewing hours and revenue, while co-CEO Ted Sarandos stated that there has not been a significant change in viewership between the first and second seasons of series. Netflix highlighted its live events as a key area of growth, contributing to new member sign-ups, although these events account for only 1% of viewing hours despite making up over 5% of content spending.
The company anticipates doubling its ad revenue year-over-year to $3 billion and is in advanced discussions with U.S. advertisers. Netflix's ad-supported plan, introduced in recent years, is part of its strategy to adapt to increased competition in the media landscape. The company continues to explore options for expanding its offerings, including the potential for a free tier in certain markets, although no immediate plans have been established.
Netflix emphasized its commitment to reinvesting in its business and maintaining a healthy balance sheet, while also reiterating its stance as primarily a builder rather than a buyer in the current competitive environment.