Netflix shares moved lower after the company delivered a second-quarter report that was broadly in line with Wall Street expectations but failed to satisfy investors looking for a stronger outlook. The streaming company posted revenue of $12.56 billion, up 13% from a year earlier and just below analyst estimates, while earnings came in at 80 cents per share, slightly ahead of forecasts. Net income rose to $3.40 billion from $3.13 billion in the same period last year.
The revenue increase reflected membership growth, higher pricing and stronger advertising income. Netflix said the effects of its earlier subscription price increases were in line with what it had expected. Even so, the company’s shares fell more than 7% in Friday trading as the market reacted to the guidance rather than the quarter itself. Netflix now expects third-quarter revenue to rise 12% and narrowed its full-year 2026 revenue forecast to a range of $51 billion to $51.4 billion, from a previous range of $50.7 billion to $51.7 billion.
Engagement remains in focus
Analysts also pressed the company on engagement trends, after recent reports raised questions about viewing patterns. Netflix said engagement remained “healthy,” pointing to more than 97 billion hours of content watched in the first half of the year and noting that live events were a major draw. Co-CEO Greg Peters said viewing hours do not translate directly into revenue and profit, while co-CEO Ted Sarandos said there had been no material change in second-season viewing compared with first-season performance.
At the same time, Netflix said it will reduce how often it publishes its “What We Watched” reports, which offer a look at viewing activity. After the latest report covering the first half of 2026, the company will move to an annual schedule beginning in 2027, with publication set for the first quarter. Netflix said the change is meant to keep attention on financial results such as revenue and operating profit. The company also highlighted live programming as an increasingly important part of its strategy, even though it still represents a small share of total viewing hours.
Source: cnbc.com
