Netflix reported second-quarter revenue of $12.56 billion on Thursday, July 16, up 13.4% from a year earlier as membership growth, price increases and advertising continued to lift sales. Diluted earnings rose to $0.80 a share from $0.72.

The quarter largely matched Netflix's own forecast. Against Wall Street expectations reported by CNBC before the release, earnings per share came in one cent higher while revenue was about $20 million lower. The more important signal for investors is the pace: revenue growth slowed from 16.2% in the first quarter, and Netflix expects it to ease again to 11.7% in the third.

Netflix nevertheless held its full-year operating-margin target at 31.5% and narrowed its 2026 revenue forecast to $51.0 billion to $51.4 billion. The company said that range would represent 13% to 14% annual growth.

The numbers

  • Revenue: $12.56 billion, up 13.4% year over year.
  • Operating income: $4.19 billion, up 11%.
  • Operating margin: 33.4%, down from 34.1% a year earlier but slightly ahead of Netflix's forecast.
  • Net income: $3.40 billion, up from $3.13 billion.
  • Diluted EPS: $0.80, up 11%.
  • Free cash flow: $1.53 billion, down from $2.27 billion a year earlier.

Why investors and customers care

Netflix said recent price increases in markets including the United States, Mexico and Spain performed in line with its expectations. That matters because higher prices remain one of the main engines of revenue growth as the company pushes into advertising, live events, video podcasts and games.

The ad business is becoming more material. Netflix still expects advertising revenue to roughly double to about $3 billion in 2026. It is expanding programmatic access to pause ads and live-event inventory, while using artificial intelligence across ad planning, creative production, campaign management and reporting.

Engagement remained positive but modest. Members watched more than 97 billion hours in the first half of 2026, up 2% from a year earlier, even with competition from the Winter Olympics and the World Cup. Netflix said live programming represents just over 5% of content spending but only about 1% of viewing hours; however, live events produced six of its 10 biggest new-member signup days over the past five years.

The caveat

Growth is still decelerating, and the cash-flow comparison was weaker. Netflix said quarterly free cash flow fell partly because of higher tax payments related to the Warner Bros. termination fee. The company maintained its full-year free-cash-flow forecast of about $12.5 billion.

Netflix also plans to publish its detailed viewing report annually beginning in 2027 instead of twice a year. Investors will still receive weekly Top 10 data, but the change reduces the frequency of a broad engagement disclosure at a time when viewing trends are closely watched.

What to watch next

For the third quarter, Netflix forecast $12.86 billion in revenue, a 33.2% operating margin and diluted EPS of $0.82. The earnings interview beginning at 4:45 p.m. Eastern is expected to focus on the slowdown in growth, the effects of recent price increases, advertising momentum and how quickly newer formats can add meaningful engagement.