Netflix Revenue Hits $12.56 Billion in Second Quarter, Misses Forecasts Slightly

Netflix's second-quarter revenue reached $12.56 billion, falling just short of the $12.58 billion anticipated by Wall Street analysts. However, the streaming giant surpassed expectations on earnings per share, reporting $0.80 against an expected $0.79, and its operating income came in at $4.193 billion, exceeding the $4.13 billion forecast.

Despite the slight revenue miss, Netflix highlighted "healthy" subscriber engagement, particularly noting the popularity of live content. The company reported that viewers spent 97 billion hours on Netflix screens in the first half of the year, equating to 11 million years. This engagement metric has been a key indicator for investors, though Netflix plans to reduce the frequency of its publication, moving from quarterly updates to only a first-quarter report in 2027. The focus will shift to core financial metrics like revenue and operating profit.

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The purpose of separating the publication of the report from our performance is to maintain focus on our most important financial key figures - revenue and operating profit.

The company's growth is attributed to subscriber expansion, pricing strategies, and increased advertising revenue, which is projected to reach $3 billion in 2026. Netflix anticipates earnings per share to rise to $0.82 in the third quarter, with an expected 12% revenue growth. Popular content in the second quarter included "I Will Find You," "Legends," and "Teach You a Lesson," with the company also exploring video podcasts and cloud-based TV games to broaden its offerings.

Following a significant stock drop in April after first-quarter results missed expectations, Netflix saw its shares fall 7.5% in after-hours trading. The company's decision not to pursue the acquisition of Warner Brothers, which ultimately went to Paramount Skydance Corp., was seen by some as an attempt to address engagement concerns, though it did not materialize. Reed Hastings, co-founder of Netflix, stepped down as chairman in June.

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I think some people see the attempt with Warner Brothers as a measure to counteract concerns about engagement, but as you know, it did not succeed.