Netflix Q2 Earnings Results In-Line With Expectations, Stock Drops

Key Points:

• Netflix reported Q2 2026 revenue of $12.56 billion, up 13.4% year-over-year, with net income of $3.4 billion and earnings per share of 80 cents, meeting Wall Street expectations but with a slightly lower operating margin than the previous year.
• The company issued weaker-than-expected Q3 guidance, projecting revenue growth of 11.7% to $12.86 billion, below analyst estimates of around $13 billion, causing shares to drop as much as 9% in after-hours trading to their lowest level in over a year.
• Viewing hours grew 2% in the first half of 2026 despite competition from major sporting events, and Netflix announced it will shift its “What We Watched” report from biannual to annual publication starting in 2027 to focus more on financial metrics.
• Netflix’s ad business is on track to generate approximately $3 billion in 2026, with strong interest in live programming such as the 2027 FIFA Women’s World Cup and expanded NFL content, although live events currently represent a small share of total view hours.
• The company completed its largest quarterly stock buyback of $4.7 billion in Q2 and has $27.1 billion remaining in buyback authorization, aiming to support its share price amid ongoing price increases and competitive pressures.