Netflix reported Q2 2026 earnings after the market close Thursday and the stock fell more than 8 percent in after-hours trading, the second consecutive quarter investors responded to results with a sell-off despite numbers that were largely in line with expectations.
The headline figures: revenue of $12.56 billion, up 13 percent year over year, just barely missing the $12.587 billion consensus. EPS of 80 cents against the 79 cent estimate, a penny beat. Net income of $3.40 billion.
The company narrowed its full-year revenue guidance to $51 billion to $51.4 billion and projected Q3 revenue growth of 12 percent, both consistent with prior forecasts but not enough to excite investors who had been hoping for acceleration.
The engagement picture is what spooked the market most. Netflix said viewing hours grew 2 percent in the first half of 2026, accelerating from 2025, the company noted, crediting animated originals, K-dramas and live events including the MLB Home Run Derby. But the company simultaneously announced it is cutting back on the frequency of its "What We Watched" reports, the public disclosures of viewing data that analysts and competitors use to benchmark Netflix's performance.
Reducing that transparency is not the move of a company that wants everyone closely watching its engagement numbers.
CEO Greg Peters and CFO Spence Neumann pledged more content and more AI on the earnings call, specifically AI tools to accelerate production and reduce costs, and a broader content slate in the second half of 2026.
Netflix's ad revenue is on track to roughly double year over year to approximately $3 billion for the full year. The World Cup Final halftime show on Netflix Sunday is the next major live event.
The stock was down more than 40 percent from its 2026 highs before Thursday's report. It fell another 8 percent after.