Netflix narrows FY revenue forecast, to scale back viewing disclosures

Overview

• Streaming platform's Q2 revenue grew 13% yr/yr, slightly missing analyst expectations

• Diluted EPS for Q2 rose 11% yr/yr to $0.80

• Company says revenue growth driven by membership, pricing, and increased ad revenue

• Netflix will move its "What We Watched" biannual viewing report to an annual release beginning in 2027, extending a multi-year pullback in engagement

Outlook

• Netflix sees Q3 revenue at $12.86 bln and operating margin of 33.2%

• Company narrows 2026 revenue forecast to $51.0-$51.4 bln, operating margin at 31.5%

• Company expects Q3 revenue growth driven by memberships, pricing and ad revenue

Result Drivers

• MEMBERSHIP GROWTH - Co said Q2 revenue growth was driven by increases in membership

• PRICE CHANGES - Co said recent price changes contributed to revenue growth, with partial impact in UCAN

• AD REVENUE - Co said increased ad revenue contributed to Q2 revenue growth

Key Details

*Applies to a deviation of less than 1%; not applicable for per-share numbers.

Analyst Coverage

• The current average analyst rating on the shares is "buy" and the breakdown of recommendations is 40 "strong buy" or "buy", 12 "hold" and no "sell" or "strong sell"

• The average consensus recommendation for the online services peer group is "buy"

• Wall Street's median 12-month price target for Netflix Inc is $112.00, about 52% above its July 15 closing price of $73.68

• The stock recently traded at 20 times the next 12-month earnings vs. a P/E of 29 three months ago

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(This story was created using Reuters automation and AI based on LSEG and company data. It was checked and edited by a Reuters journalist prior to publication.)