Netflix shares tumbled as much as 9% in after-hours trading Thursday after the company posted mixed second-quarter earnings and announced plans to reduce viewership disclosures.
The streaming giant reported Q2 revenue of $12.56 billion, up 13.4% year over year, falling just short of analyst expectations of $12.59 billion, according to LSEG Data & Analytics.
Net income for the quarter came in at $3.4 billion, translating to 80 cents per share, roughly in line with the 79 cents per share analysts had forecast.
Netflix’s Q3 revenue guidance of $12.86 billion disappointed investors, coming in below the roughly $13 billion Wall Street had anticipated heading into the report.
Operating margin slipped to 33.4% in the second quarter, down from 34.1% during the same period a year earlier, adding another soft note to an already underwhelming set of results.
Beyond the financial figures, investors reacted sharply to Netflix’s decision to scale back the publication of its “What We Watched” engagement reports from twice a year to annually starting in 2027.
The company said its goal in separating when “What We Watched” is published from its earnings results is to keep the focus on financial metrics like revenue and operating profit.
Netflix has been releasing the report twice a year, in addition to its regular weekly top 10 lists, since December 2023, making the pullback a notable shift in transparency.
Co-CEO Greg Peters addressed questions about the relationship between viewing and business performance during the earnings call, saying: “I’ll start by saying there is not a linear relationship between viewing hours and revenue and profit, because all hours are not created equal.”
Co-CEO Ted Sarandos pushed back on recent reports suggesting second seasons of Netflix originals suffer steep viewership declines, stating: “In aggregate, we are not seeing any material change in our second-season viewing compared to season ones. Our second seasons are performing well within our bands of expectation.”
The company said members watched more than 97 billion hours of total content in the first half of 2026, with viewing hours growing 2%, an improvement over the 1.5% growth seen in the comparable period in 2025.
Netflix noted the growth came “despite the competitive impact of the Winter Olympics and the World Cup this year,” framing the improvement as a sign of healthy underlying demand for its content library.
Analysts expressed frustration that reducing viewership reporting frequency further limits the already thin set of operational metrics Netflix makes available to outside observers.
Specific viewership data for Netflix’s growing lineup of video podcasts was absent from the latest report, with those titles lumped under “Other Shows,” as the company said the format only launched earlier this year.
Netflix said its advertising business remains on track to deliver approximately $3 billion in revenue in 2026, with U.S. upfront negotiations described as being in “advanced stages.”
The company highlighted live events as a major growth driver, with live programming accounting for six of the top 10 new member sign-up days over the past five years, though it represents only about 1% of total viewing hours.
For the full year 2026, Netflix narrowed its projected revenue range to $51.0 billion to $51.4 billion, while keeping its expected operating margin unchanged at 31.5%.
CFO Spence Neumann said Netflix repurchased approximately $4.7 billion of its own stock during the quarter, its largest quarter of share buybacks, leaving $27.1 billion remaining under its current buyback authorization.
