Netflix profit rises 9% to $3.4B as investors eye growth slowdown

Netflix Inc. reported second-quarter net income of $3.4 billion, up 9% from a year earlier, as the streaming giant sought to reassure investors about its growth trajectory.

"We're entertaining an audience approaching a billion people with still lots of room to grow into our addressable market on every measure," Spencer Neumann, Netflix's chief financial officer, said in the earnings presentation.

Revenue reached $12.6 billion, up 13% from a year earlier and roughly in line with analyst estimates. The company forecast 12% revenue growth in the third quarter but trimmed its full-year 2026 revenue outlook to $51 billion from $51.4 billion. Advertising revenue is on track to reach $3 billion this year, the company said.

The results come as Netflix's share of US television viewing fell to 7.8% in April, the lowest since May 2025, according to Nielsen data. YouTube's share rose to 13.4% from 12.4% a year earlier. Netflix shares have declined 41% over the past 12 months, closing Thursday at $74.35, up 1%.

"The engagement elephant continues to rear its head and investors are on edge that an earlier price hike in a seasonally tough period and lighter content slate could have driven more churn than usual," Morgan Stanley Research analysts wrote in a note.

Netflix told shareholders it has a "sophisticated understanding" of its consumers and that engagement on its platform is "healthy." The Los Gatos-based company said members watched more than 97 billion hours in the first half of 2026, up 2% from a year earlier. Top titles included the crime thriller "I Will Find You" with 87 million views and the romantic comedy "Voicemails for Isabelle" with 71 million views.

The company plans to allocate more than 5% of its content spend to live programming this year, citing live events as a key driver of subscriptions. Live content accounted for six of the top 10 new member sign-up days over the past five years, Netflix said. The push includes NFL games and Major League Baseball's opening day game.

Ross Gerber, co-founder and chief executive of Gerber Kawasaki Wealth and Investment Management, called the pullback a buying opportunity on Bloomberg Television, saying the sell-off may be overdone relative to the company's fundamentals.

The lowered full-year guidance and declining viewing share suggest Netflix faces a more competitive landscape than in prior years, even as its advertising and live-content initiatives open new revenue streams. Investors will watch third-quarter subscriber data and advertising revenue growth for signs that the strategy is gaining traction.

This article is for informational purposes only and does not constitute investment advice.