Netflix (NFLX) Earnings: Revenue Growth Takes Center Stage

Netflix (NFLX) has been raising prices as its stock price falls, and its second-quarter results Thursday after the close will reveal if its stock price can get a lift, too.

With the shares down more than 40% over the past year due to softer engagement and intense competition, investors will have a fresh look at whether the streaming leader can sustain double-digit revenue growth.

Wall Street expects Netflix to report adjusted earnings of approximately $0.79 per share, an increase of 9.7% from the split-adjusted $0.72 earned during the same quarter last year. Revenue is projected at approximately $12.57 billion, up 13.4% from $11.08 billion a year earlier. Those estimates are close to management’s April forecast of $12.57 billion in revenue and diluted EPS of $0.78.

The primary focus will be subscription revenue, membership growth, pricing power, and engagement. Analysts will want evidence that recent price increases are supporting average revenue per member without causing higher cancellations. Netflix has identified revenue and operating margin as its primary financial performance measures, making forward guidance at least as important as whether the company beats second-quarter estimates.

Advertising will be another major theme. Netflix previously projected approximately $3 billion of advertising revenue in 2026, roughly double last year’s level. Investors will look for progress in the ad-supported tier, growth in advertising clients, and improved monetization through the company’s advertising technology. Management’s ability to expand advertising without merely encouraging premium subscribers to move to cheaper plans will be especially important.

Analysts will also examine the content slate, spending discipline, and profitability of newer formats such as live events, sports, video podcasts, and games. Netflix forecast a second-quarter operating margin of 32.6%, down from 34.1% a year ago, reflecting heavier content-amortization growth. Commentary surrounding free cash flow and the company’s full-year 31.5% operating-margin outlook could heavily influence the stock reaction.

Netflix has faced several challenges during the past year. Competition for viewing time has intensified not only from Disney (DIS), Amazon (AMZN), and other streaming services, but also from YouTube, TikTok, and Instagram. Concerns about weakening engagement and mature-market saturation have made advertising, price increases and new programming formats increasingly important growth drivers.

The stock fell 9.7% following the previous earnings report despite better-than-expected first-quarter results. Investors focused instead on second-quarter revenue and EPS guidance that trailed the then-current Wall Street consensus, the absence of a full-year guidance increase and the unexpected departure of co-founder Reed Hastings as chairman.

The options market implies a one-day move of about +/- $5.50. With NFLX trading near $73.53 as of Tuesday’s close, that represents a move of roughly 7.5%, suggesting a potential post-earnings range of approximately $68 to $79. The indicator reflects options-market pricing rather than a directional forecast. Shares have declined nearly 22% year-to-date and 42% over the past 12 months, reflecting concerns about engagement, competition, and the company’s growth outlook. The technical picture also remains bearish. Netflix is trading below its declining 50-day moving average near $82 and its declining 200-day moving average near $94. The negative slopes of both averages imply that the stock remains in an intermediate- and longer-term downtrend heading into the earnings report.

This material is intended for informational purposes only and should not be considered a personalized recommendation or investment advice. Investors should review investment strategies for their own particular situations before making any decisions.

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