Streaming Leader Maintains Revenue Growth, Expands Advertising Business, and Reaffirms 2026 Outlook Despite After-Hours Stock Decline
Netflix (NFLX) reported second-quarter results that largely met Wall Street expectations, as continued subscriber growth, higher subscription prices, and expanding advertising revenue helped drive another quarter of solid financial performance. Despite the steady results, the company’s shares fell more than 8% in after-hours trading as investors focused on engagement trends and future transparency.
For the quarter ended June 30, Netflix generated $12.56 billion in revenue, a 13% increase from a year earlier, while adjusted earnings came in at 80 cents per share, slightly ahead of analyst estimates. Net income rose to $3.40 billion, compared with $3.13 billion in the same period last year.
Management attributed the growth to healthy membership gains, the successful rollout of recent subscription price increases, and continued momentum in its advertising business. Netflix reiterated its expectation that advertising revenue will approximately double this year to $3 billion, with negotiations for new advertising commitments in the U.S. expected to conclude in the coming weeks.
The company also emphasized that viewer engagement remains strong, reporting more than 97 billion hours of content watched during the first half of 2026. Live programming—including sports and special events—continues to attract new subscribers, with six of the company’s ten biggest sign-up days over the past five years tied to live events.
In a notable change, Netflix announced it will publish its “What We Watched” engagement report only once a year beginning in 2027. Management said the move is intended to shift investor attention toward core financial metrics such as revenue and operating profit rather than viewership statistics.
Looking ahead, Netflix expects third-quarter revenue to grow approximately 12% and reaffirmed its full-year 2026 outlook. The company also stated it remains focused on investing organically while pursuing selective acquisition opportunities, maintaining a disciplined approach as competition across the global streaming industry continues to intensify.
