LOS GATOS, Calif. — Netflix reported double-digit revenue growth in its second quarter as higher subscription prices, membership gains and expanding advertising sales lifted financial results, although the streaming company's outlook for the current quarter fell short of Wall Street expectations, sending its shares lower in after-hours trading.
The company said revenue rose about 13% from a year earlier to $12.56 billion in the quarter ended June, while net income increased to $3.4 billion from $3.13 billion a year earlier. Diluted earnings per share rose to 80 cents from 72 cents, slightly ahead of analysts' expectations, according to market data cited by the company and financial data providers.
Netflix attributed the revenue increase to continued membership growth, price increases introduced earlier this year and expanding advertising revenue. The company said recent price changes had performed in line with expectations and reiterated that advertising remains a significant long-term growth opportunity.
For the third quarter, Netflix forecast revenue of about $12.86 billion, implying growth of roughly 12% from a year earlier. The projection came in below analysts' expectations, prompting investors to push the stock lower after the earnings release despite the company's stronger profit performance.
Netflix also maintained its full-year revenue outlook within a narrowed range of $51 billion to $51.4 billion, while reaffirming expectations that advertising revenue will approximately double this year to around $3 billion.
The company said it would reduce the frequency of its audience engagement disclosures, shifting from publishing its "What We Watched" report twice a year to an annual release beginning in 2027. Management said the move reflects a greater emphasis on financial performance rather than engagement metrics, while noting that viewing hours increased during the first half of 2026 despite competition from major global sporting events.
Executives also highlighted live programming and advertising as key strategic priorities. According to the company, live events have generated several of Netflix's strongest days for new-member sign-ups in recent years, while the advertising-supported tier continues to expand as the company seeks additional revenue streams beyond subscription growth.
Investors nevertheless focused on the softer near-term revenue outlook and the reduced frequency of engagement disclosures. Netflix shares fell more than 7% in after-hours trading following the results, extending a broader decline in the stock this year.
