The streaming giant reported second-quarter 2026 earnings in line with Wall Street expectations, as investors remain concerned about Netflix’s weak viewer engagement metrics. However, the company issued weaker-than-expected guidance for the third quarter, and the stock price fell.
Netflix reported second-quarter revenue of $12.56 billion, an increase of 13.4% year over year, and net income of $3.4 billion (equivalent to 80 cents per share). Wall Street analysts, on average, had expected earnings of $12.59 billion, or 79 cents a share, according to LSEG Data & Analytics. Operating margin for the second quarter was 33.4%, down from 34.1% in the same period last year.
For the third quarter, Netflix said it expects revenue to rise 11.7% to $12.86 billion, which is lower than analysts expected, who had expected the number to be about $13 billion. The streamer predicted operating margin of 33.2% for the September 2026 quarter, compared with 28.2% in the year-ago period.
Netflix stock fell as much as 9% in after-hours trading on Thursday, its lowest level in more than a year.
The company said viewing hours increased by 2% in the first half of 2026, compared to a 1.5% increase in the same period in 2025, “despite the competitive impact of this year’s Winter Olympics and World Cup.” On Thursday, Netflix released its semi-annual “What We Saw” report for the first half of 2026. Going forward, Netflix says it will “move to publishing this report in the first quarter of each year starting in 2027.”
According to the company’s letter to shareholders, “The purpose of separating reporting from revenue results is to maintain a focus on our key financial metrics: revenue and operating income. With this change, we will continue to report industry-leading title-by-title and total viewing time data, including weekly top 10 lists of movies and series from over 90 countries.”
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“Overall, our engagement remains healthy and, like everything we do, we strive to improve every day,” Netflix said.
The company said its advertising business is on track to deliver approximately $3 billion in revenue in 2026. Netflix said preliminary negotiations in the U.S. are “in advanced stages and we expect the deal to close in the coming weeks.” The company said there is strong interest in its live programming lineup, including the 2027 FIFA Women’s World Cup and expanded NFL, WWE and MLB events.
On the live programming side, Netflix said live programming will account for just over 5% of content spending this year, but only about 1% of viewing time. That said, live event programming accounted for six of the top 10 new subscriber days over the past five years (and Netflix notes that it didn’t start streaming live events until 2023).
The second-quarter results reflect Netflix’s recent price increases, including across three plans in the U.S., marking the company’s second price increase in just over a year. The company said the results of recent price changes are “consistent with prior changes and our expectations.”
For the full year 2026, Netflix has reduced its revenue forecast range to $51 billion to $51.4 billion (within its previous range) and kept its expected operating margin unchanged at 31.5%.
Meanwhile, on April 22nd, Netflix’s board of directors approved an additional $25 billion in common stock repurchases to boost the company’s stock price. CFO Spence Newman said Netflix repurchased about $4.7 billion in stock during the quarter, the largest share repurchase in a quarter, and the company currently has $27.1 billion remaining on its buyback authorizations.
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Pictured above (left to right): Louis Partridge as Tewksbury, Millie Bobby Brown as Enola Holmes, and Himesh Patel as Dr. Watson in Netflix’s Enola Holmes 3
