Netflix Misses Revenue Forecast and Lowers 2026 Outlook, Shares Drop 8%

Netflix reported its second-quarter earnings after Wall Street closed, posting an adjusted net profit of 80 cents per share, slightly above analysts' average estimate of 79 cents. However, revenue reached $12.56 billion, a 13% increase year-over-year but just below the expected $12.59 billion. The streaming giant revised down its revenue guidance for 2026 to a range of $51 billion to $51.4 billion, narrowing from the previous forecast of $50.7 billion to $51.7 billion. Following the report, Netflix's stock fell 8% in after-hours trading.

The company reaffirmed its projection that advertising revenue will double this year to $3 billion. Earlier in 2024, Netflix raised subscription prices, and the firm stated that the results align with its expectations. Netflix described subscriber engagement with its content as "healthy," highlighting that live events were a key attraction, with subscribers watching over 97 billion hours of content in the first half of the year.

Investor attention had focused on engagement metrics amid reports of declining viewership after the first season of some series. In response, Netflix announced it will reduce the frequency of its "What We Watched" viewership reports, which provide insights into engagement data. Starting in 2027, the company will switch to releasing these reports annually during the first quarter, with the latest report covering the first half of 2026.