Netflix reported Q2 2026 revenue of approximately $12.56 billion, a 13.4% increase from the same quarter last year but slightly below analyst predictions of about $12.58-12.59 billion [1, 2, 3]. Net income rose more than 9% year-over-year to $3.4 billion, while earnings per share (EPS) came in at $0.80, just above the $0.79 estimate [2, 3].
For Q3 2026, Netflix forecast revenue of roughly $12.86 billion and EPS of $0.82, both below Wall Street estimates of $13 billion and $0.84, signaling a deceleration in growth [1, 2, 3]. The company projected third-quarter revenue growth of 11.7% to 12%, down from previous quarters [2, 4].
Netflix's global viewing hours reached about 97 billion in the first half of 2026, a 2% increase over the year-earlier period [1, 2, 4]. Despite concerns over engagement, Netflix executives said overall user engagement remains healthy. Co-CEO Greg Peters said, "Watching time and frequency do not have a simple linear relationship with our revenue and earnings because different content creates different value. Overall engagement remains healthy despite concerns" [2]. Another note in Netflix's shareholder letter emphasized a focus on quality and variety, stating "Engagement is not just the quantity of view hours, but also refers to the quality and variety of our offering" [5].
Netflix has faced criticism for reducing transparency around engagement reporting. Since early 2025, the company has stopped releasing quarterly subscriber numbers publicly, citing volatile metrics that some investors say reduce transparency [2, 4]. Starting in 2027, Netflix will cut its "What We Watched" viewing hours report from twice yearly to once yearly to focus more on revenue and operating profit data [1, 3].
To compete with short-form platforms like YouTube and TikTok, which have surpassed Netflix in average daily watch time on some measures, Netflix is diversifying content. It signed licensing deals for short-form video in July 2026 and invested in live sports, video podcasts, and gaming, according to co-CEO Greg Peters, who said, "We’ll continue to expand the variety of our entertainment offering ... to support different needs from (subscribers)" [1, 2, 6, 7, 8].
Netflix shares fell between 8% and 10% in after-hours trading following the earnings release and subdued Q3 outlook, reflecting investor disappointment [1, 2, 3].
On July 16, 2026, Netflix released the full Q2 earnings report and Q3 forecast, announced the reduction in viewing report frequency, and experienced the share price decline in after-hours trading [1, 2, 3]. The company remains poised to launch its new annual viewing report schedule starting in the first quarter of 2027 [1, 3].
