NFLX SEC & events · All events
◦ View hours grew +2% in H1’26 vs. +1.5% growth in 2025, despite the competitive impact of the Winter Olympics and the World Cup this year
NFLX revenue $11.1B
EPS beat consensus by 0.01
guidance we provide is our actual internal forecast at the time we report and we strive for accuracy. Our primary financial metr
#1prepared remarks
• Our financial performance remains solid and we’re on track to meet our objectives for the year: ◦ Q2 revenue grew 13% year over year (+12% on a FX-neutral basis 1 ) to $12.6B, and operating margin was 33%. Both were in-line with our guidance. ◦ For 2026, we’ve narrowed our forecasted revenue range to $51.0-$51.4B and continue to forecast an operating margin of 31.5%, both consistent with our prior guidance. • We’re delivering increasing value to our members; engagement is healthy, reflecting the quality, quantity, and variety of our offering: ◦ Harlan Coben’s I Will Find You is our most viewed new original series debut in 2026 and Swapped is on its way to becoming our second most viewed original animated film ever. ◦ View hours grew +2% in H1’26 vs. +1.5% growth in 2025, despite the competitive impact of the Winter Olympics and the World Cup this year. ◦ To better satisfy members, we’re continuing to expand the variety of our entertainment offering with video podcasts, creators like Danny Go! and Salish & Jordan Matter, and cloud TV games. • The results of our recent price changes are consistent with prior changes and our expectations. • We are leveraging AI to provide a…
#2prepared remarks
Our summary results, and forecast for Q3, are below.
#3prepared remarks
| | | | | | | | | | | | | | | | | | | | | (in millions except per share data) | Q2'25 | Q3'25 | Q4'25 | Q1'26 | Q2'26 | Q3'26 Forecast | Revenue | $ | 11,079 | | $ | 11,510 | | $ | 12,051 | | $ | 12,250 | | $ | 12,560 | | $ | 12,860 | | Y/Y % Growth | 15.9 | % | 17.2 | % | 17.6 | % | 16.2 | % | 13.4 | % | 11.7 | % | Operating Income | $ | 3,775 | | $ | 3,248 | | $ | 2,957 | | $ | 3,957 | | $ | 4,193 | | $ | 4,268 | | Operating Margin | 34.1 | % | 28.2 | % | 24.5 | % | 32.3 | % | 33.4 | % | 33.2 | % | Net Income | $ | 3,125 | | $ | 2,547 | | $ | 2,419 | | $ | 5,283 | | $ | 3,401 | | $ | 3,452 | | Diluted EPS | $ | 0.72 | | $ | 0.59 | | $ | 0.56 | | $ | 1.23 | | $ | 0.80 | | $ | 0.82 | | | | | | | | | Net cash provided by operating activities | $ | 2,423 | | $ | 2,825 | | $ | 2,112 | | $ | 5,290 | | $ | 1,744 | | | Free Cash Flow | $ | 2,267 | | $ | 2,660 | | $ | 1,872 | | $ | 5,094 | | $ | 1,525 | | | Shares (FD) | 4,349 | | 4,340 | | 4,317 | | 4,298 | | 4,261 | | | | | | | | | | |
#4prepared remarks
__________________________________ 1 Excluding the year over year effect of foreign exchange rate movements and the impact of hedging gains/losses realized as revenues. Assumes foreign exchange rates remained constant with foreign exchange rates from each of the corresponding months of the prior-year period. | | | | | |
#5qna
Q2 Results and Forecast Q2 revenue of $12.6B was in-line with forecast and grew 13% year over year (+12% on a foreign exchange (F/X) neutral basis), driven primarily by membership growth, pricing and increased ad revenue. We delivered double digit revenue growth in all regions, surpassing the quarterly revenue mark of $4.0B in EMEA and $1.5B in both LATAM and APAC. In UCAN, Q2 revenue growth of 10% reflects only a partial quarter impact from our recent price change, which has gone well and as expected.
#6prepared remarks
Operating income in Q2 was $4.2B, up 11% year over year, and operating margin was 33.4% versus 34.1% in Q2’25. Q2 operating income and margin were slightly ahead of forecast due to the timing of expenses. As we noted in previous letters, operating income in Q2 grew slower than revenue because our content amortization growth is higher in the first half of the year; we continue to expect content amortization to grow slower in the second half of the year and to increase ~10% for 2026. Diluted EPS for the quarter amounted to $0.80 vs. $0.72 in Q2’25 (+11% year over year), slightly above our forecast.
#7prepared remarks
As a reminder, the guidance we provide is our actual internal forecast at the time we report and we strive for accuracy. Our primary financial metrics are revenue for growth and operating margin for profitability. Our goal is to sustain healthy revenue growth, expand operating profit and margin, and deliver growing free cash flow.
#8prepared remarks
For Q3, we expect revenue growth of 12% (or 11% F/X neutral) driven by growth in memberships, pricing, and ad revenue. We project an operating margin of 33.2% compared with 28.2% in the year ago quarter.
#9prepared remarks
Our 2026 outlook is consistent with our prior forecast: we are narrowing our revenue forecast to $51.0-$51.4B, which represents 13%-14% growth (~12% F/X neutral), driven by growth in memberships and pricing, and a projected rough doubling of our ads revenue to approximately $3 billion. We continue to anticipate an operating margin of 31.5% for 2026 both on a reported basis and based on F/X rates as of January 1, 2026 vs. 29.5% in 2025. Our forecast implies annual operating income growth of 20%+ for 2026.
#10prepared remarks
Our Focus As we outlined in our last letter, we have three main areas of focus:
#11prepared remarks
First, delivering more entertainment value. We want to win the most valuable moments of truth and thrill our members. We’ve used “engagement” as a shorthand for the value we deliver members. But, as we’ve developed an increasingly sophisticated understanding of how consumers ascribe value to our service, we know not all hours are equal. Time spent is just one aspect of strong engagement - quality and variety also matter. The key is to improve across all of those dimensions: quality, variety, and quantity.
#12prepared remarks
Quality is defined by how much our members enjoy and love a title. We work every day to raise the bar on our core series and film offering, which we have successfully done since we launched streaming in 2007. Animation is a good example of how patient and focused execution can pay off. We started original animation in 2018, kept improving, and last year produced a true breakout global phenomenon with KPop Demon Hunters . It became our first title to surpass over 52 consecutive weeks in the Global
#13prepared remarks
Top 10. We built on that momentum in Q2 with Swapped * (137M views 2 ) which is loved by our members and on its way to becoming our second most viewed 4 original animated film ever.
#14prepared remarks
In addition to a high-quality slate, we also need a wide variety of programming because we serve a massive audience (approaching 1B people) with broad and diverse tastes, moods and needs. Different types of content impact our business differently – some drive more acquisition, some primarily aid retention, and some make the service feel indispensable. For example, in 2026, we expect live programming to account for just over 5% of our content spend but only ~1% of view hours. Yet, live event programming accounted for six of the top 10 new member sign-up days over the last five years (and we've only been doing live events since 2023).
#15prepared remarks
Quantity of engagement is also important and, as detailed in our bi-annual What We Watched 5 report, in the first half of 2026, our members watched more than 97 billion hours, up 2% year over year. This was slightly faster than the 1.5% growth in 2025, despite the competitive impact of the Winter Olympics and the World Cup this year. Non-English content again drove more than a third of all viewing this half, with standout titles from Korea, Japan, Spain, and India.
#16prepared remarks
Our Q2 slate delivered a host of titles that our members loved and were broadly viewed, including Harlan Coben’s I Will Find You * (87M views) - our biggest new original series debut in 2026 so far, Legends * from the UK (20M views), K-drama Teach You a Lesson * (55M views) - which is on track to become our second-most viewed Korean show globally 6 , Berlin and The Lady with an Ermine * (28M views) from Spain, The Polygamist * (24M views) from South Africa, Flunked * (11M views) from France, and Rosario Tijeras S5* (6M views) from Mexico. We also continued to strengthen our film slate, delivering hits across multiple genres, like action with Apex * (131M views) starring Charlize Theron, rom-coms with Office Romance * (63M views) featuring Jennifer Lopez and Voicemails for Isabelle * (71M views), drama with the Emmy nominated feature, Remarkably Bright Creatures * (53M views) starring Sally Field, and documentaries with Maternal Instinct * (54M views) and The Crash * (67M views).
#17prepared remarks
Beyond series and films, we continually evolve and expand our entertainment offering to better meet the needs of members and strengthen our engagement.
#18prepared remarks
• For instance, approximately half of our viewing occurs in the evening, but our recently launched video podcasts over-index on viewing during the day and on mobile devices, an indicator that this engagement is incremental. We recently added Jay Shetty’s On Purpose and Allegedly , as well as announced podcasts featuring Kate Hudson and Oliver Hudson, Lele Pons and Martha Stewart through our partnership with iHeartMedia. • We have a history of working with the most talented storytellers from around the world and, increasingly, that includes top creators from open content platforms. We’ve had success with creators including Danny Go!, Ms. Rachel, Mark Rober, and Salish & Jordan Matter, and recently announced collaborations with the Stokes Twins, Alan Chikin Chow, Nick DiGiovanni, and Mythical. Ms. Rachel has spent 27 weeks in the Global Top 10 since debuting on Netflix last year and, more recently, Salish & Jordan Matter and Danny Go! have spent eight and seven weeks, respectively, in the Global Top 10 since coming to Netflix in April. We also announced partnerships 7 with leading publishers including Condé Nast, Hearst, and People, to bring their lifestyle content to members in th…
#19prepared remarks
__________________________________ 2 A view is defined as hours viewed divided by runtime for each title. Views for a title are based on the first 91 days since the release of each episode (less than 91 days denoted with an asterisk and data is from launch date through July 12, 2026). We publish our top titles based on views each week at Netflix Top 10 3 . 3 https://www.netflix.com/tudum/top10 4 Based on expected 91 day views. 5 https://about.netflix.com/en/news/what-we-watched-the-first-half-of-2026 6 Based on expected 91 day views (behind Squid Game). 7 https://www.netflix.com/tudum/articles/digital-publisher-videos | | | | | |
#20prepared remarks
• To deepen our local programming in France, last month we launched a partnership with leading local French broadcaster TF1. Netflix members in France are now able to experience TF1 programming as part of their subscription at no additional cost. This fully integrated experience includes TF1’s linear channels as well as TF1+’s on-demand content, including a wide array of scripted, unscripted and major live sports programming. While still early, we’re pleased with the initial performance. Our French members are discovering and engaging with this content (with view hours of TF1 content growing each week), a TF1 title, Secret Story has already reached our Top 10 list in France, and we’re gratified to see our partner 8 is also seeing strong early results. • Our cloud-based TV games are gaining traction. In June, we had our two most successful cloud game debuts, with the releases of FIFA World Cup: Launch Edition and Unhinged . And Netflix Playground, our app for kids games, has experienced 3x growth in daily players since its launch in April, and has fueled growth in our kids mobile games engagement, which is up 600% year over year 9 . While off a small base, these early signals give…
#21prepared remarks
Overall, our engagement remains healthy and as with all things we do, we’re working hard to improve every day. We have an exciting Q3 slate including new films like 72 HOURS with Kevin Hart, The Last House with Greta Lee & Wagner Moura, The Whisper Man with Robert DeNiro, and Call My Agent! from France, and series such as The Hawk with Will Ferrell, the fifth and final season of Outer Banks , Little House on the Prairie , the fourth installment of Ryan Murphy’s anthology series, Monster: The Lizzie Borden Story , The Gentlemen S2 from the UK, The East Palace from Korea, The Doll from Poland, and Lovesick from Mexico. We’ll continue to build out our live programming – we have two Major League Baseball events ( Home Run Derby and Field of Dreams game) in Q3, as well as the Tyson Fury vs. Anthony Joshua fight later this year. We also recently announced an expanded agreement with the NFL, securing a premium slate of games that includes a week-one matchup in Q3, as well as a Thanksgiving Eve game and NFL Christmas Gameday in Q4, and a final week contest in Q1 of next year.
#22prepared remarks
Second, leveraging technology to improve every aspect of our service and our business. To support our growing content offering, we continue to evolve our product to create more personalized, immersive, and interactive experiences for our members. We are leveraging LLMs to improve title discovery and to better understand member preferences. We’re also enhancing search for our members with new voice search functionality and AI-powered natural language search.
#23prepared remarks
Across the production lifecycle, from concept and pre-visualization through post and delivery, GenAI utilization by our creative partners is scaling quickly. In 2026, GenAI workflows have been used in roughly 300 of our titles, with the largest concentration of work in post-production. We are increasingly leveraging these tools to deliver higher quality output more quickly and at a lower cost than traditional methods. In some cases, productions would have had to leave out key shots and sequences in the absence of GenAI technology. For example, Glory (India), Brasil 70: A Saga do Tri (Brazil), and The American Experiment (US) utilized GenAI tools to create highly complex sequences (e.g., enhanced crowds, historical battle sequences, and worldbuilding establishing shots).
#24prepared remarks
In our ads business, we continue to invest in developing a premium ad experience which delivers highly engaged and attentive audiences to advertisers. In Q2, we expanded our AI-powered tools across the full advertising lifecycle, from planning and creative production to campaign management, optimization, and reporting. We're also automating more of the workflow around how advertisers transact with us by extending programmatic access to Pause Ads and live inventory this summer. This reduces the manual effort that has historically limited access for smaller buyers, opening Netflix to a broader range of advertisers over time. These investments enhance the value of our existing inventory and lay the groundwork for the next phase of growth in our ads business. __________________________________ 8 https://www.hollywoodreporter.com/business/business-news/tf1-netflix-deal-record-streaming-figures-france-1236642951/ 9 Game play hours are not included in our What We Watched report. | | | | | |
#25prepared remarks
Third, improving monetization. Building out our ads business continues to be a top priority and we remain on track to deliver approximately $3 billion in ads revenue in 2026. Our US upfront negotiations are in advanced stages, and we expect commitments to close in the next few weeks. We are seeing strong interest in our Live events lineup — Women's World Cup, an expanded NFL slate, WWE, MLB events and more — alongside continued demand for our unparalleled breadth of entertainment titles. The growth in our ads business is being fueled by the strength and variety of our slate combined with our investments in AI powered tools and workflows, the Netflix Ads Suite and broader programmatic capabilities.
#26prepared remarks
We offer a wide range of plans and feature sets at accessible price points to provide the best value for members. As we expand and improve our entertainment offering, we occasionally adjust prices so that we can reinvest in our service. Our first half price changes, in markets like the US, Mexico and Spain, have gone well with the impact consistent with prior price changes and our expectations.
#27prepared remarks
We are constantly testing, assessing, and improving the membership lifecycle. Over the years, investments in our product capabilities (e.g. TV and mobile UI) have given us greater flexibility to evaluate the best ways to attract and retain members in different markets. We’ve tested a variety of methods, including a low cost first month in Japan to coincide with the WBC, and an “upgrade on us” offer in various countries around the world. As part of this test and learn strategy, last week we began re-testing free trials for non-rejoining new members in a number of markets around the world (excluding the US and UK).
#28prepared remarks
Evolving Our View Hours Disclosure Engagement is important to our business. But as discussed above, engagement is not just the quantity of view hours, but also refers to the quality and variety of our offering. To make this clearer, we’re making a change to our view hours disclosure.
#29prepared remarks
After today’s What We Watched report, which covers the first half of 2026, we will shift to publishing this report annually in the first quarter, beginning in 2027. The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics – revenue and operating profit. With this change, we will still report industry-leading title-by-title and total view hours data (including our weekly Top 10 lists for movies and series in more than 90 countries).
#30prepared remarks
Cash Flow and Capital Structure Net cash generated from operating activities was $1.7B vs $2.4B in the prior year period. Free cash flow (FCF) 10 in Q2’26 totaled $1.5B vs. $2.3B in Q2’25. This included higher cash tax payments due in part to the Warner Bros. termination fee. For the full year, we continue to expect FCF of approximately $12.5B, and an annual cash content spend to amortization ratio of ~1.1x.