Live: Will Netflix’s Q2 Earnings Tonight Spark a Rebound for the Stock?

That wraps up our initial coverage of Netflix’s Q2 results. Thank you for stopping by!

Netflix continues to grow, with second-quarter revenue reaching $12.56 billion, net income totaling $3.4 billion, and EPS of $0.80 narrowly beating the $0.79 estimate. The company also expects advertising revenue to roughly double to $3 billion in 2026.

The problem was guidance. Netflix expects third-quarter revenue of $12.86 billion and EPS of $0.82, below estimates of $13.01 billion and $0.84, respectively.

For a stock carrying a premium valuation, continued growth is not enough when Wall Street expects even more.

The sell-off now raises the question for investors: Is Netflix undergoing a healthy valuation reset, or is the pullback creating a long-term buying opportunity?

Overall Grade: B-. Netflix (NASDAQ:NFLX | NFLX Price Prediction) beat EPS but missed on revenue, free cash flow, and Q3 guidance, muting the rebound narrative built up during earnings week.

Resilient top-line growth and strong margins collide with softer forward metrics.

The aggressive buyback signals conviction, while FCF pressure gives bears ammunition heading into the 4:45 PM ET call.

Netflix still expects ad revenue to roughly double year over year to about $3 billion in 2026, providing another growth engine alongside pricing and global subscriber engagement.

Netflix reported more than 97 billion viewing hours during the first half, up 2% year over year.

Regional growth was broad-based, led by a 21% revenue increase in Latin America, followed by 16% growth in Asia-Pacific, 14% in Europe, the Middle East and Africa, and 10% in the United States and Canada.

Netflix’s second-quarter revenue of $12.56 billion narrowly missed estimates, while free cash flow fell 33% to $1.53 billion, well below the $2.72 billion expected.

Netflix attributed the cash-flow pressure to higher tax payments, partly related to the Warner Bros. Discovery termination fee.

The company’s third-quarter outlook also missed across the board. Netflix expects revenue of $12.86 billion, EPS of $0.82, and a 33.2% operating margin, all below Wall Street’s forecasts.

Its full-year outlook calls for approximately $12.5 billion in free cash flow and a 31.5% operating margin, compared with estimates of $13.09 billion and 31.7%, respectively.

Netflix just reported Q2 earnings, with shares initially up 2% following the report. Here are the key numbers:

• Revenue: $12.56 billion vs. $12.58 billion expected
• EPS: $0.80 vs. $0.79 expected

Quick Read:

Netflix delivered a small EPS beat, although revenue fell slightly short of Wall Street’s expectations.

Revenue still increased 13% year over year, while EPS rose 11%, signaling that the company’s underlying growth remains healthy.

Netflix (NASDAQ:NFLX) reports Q2 earnings tonight at 4:05 PM ET, with shares at $73.72 and down 21.42% YTD.

Bull Case

• Ad revenue tracking to roughly double to about $3 billion in 2026, with the advertiser base up over 70% year over year.
• Reaffirmed FY operating margin of 31.5% on 12% to 14% revenue growth.
• Polymarket now assigns a 59.5% beat probability, and July 17 call volume outpaces puts 2.46:1.

Bear Case

• Q1 EPS missed by -8.55% even with the Warner Bros. windfall.
• Content amortization peaks in Q2, threatening margins.
• Misses have averaged a -9.89% day-of drop, and insiders are net sellers across 110 recent transactions.
• Valuation remains full at a 24 P/E.

With shares at $73.72 and down 21.42% YTD, Netflix’s Q2 earnings call at 4:45 PM ET tonight will help to set the tone for the back half of the year.

Top Analyst Questions:

1. Is ad revenue on track to reach the $3 billion 2026 target?
2. How is capital being deployed post-Warner Bros., with $6.8 billion in buyback authorization remaining?
3. Has content amortization truly peaked?
4. What are early Netflix Playground and vertical-feed engagement metrics?
5. Any update on the Brazilian ~$700M tax dispute?

Key Topics:

Free-trial reintroduction, Spain price hike, Mercado Libre bundle, InterPositive GenAI integration.

Buzzwords:

“incrementality,” “conversational discovery,” “operating leverage,” “engagement per member.”

Red Flags:

Guidance below the 32%-34% margin consensus, softer H2 ad ramp, or hedged language on Lionsgate M&A speculation.

With Netflix (NASDAQ:NFLX) set to report after the close, the Q1 setup remains the single most important frame for interpreting tonight’s numbers.

Here are 3 of the most important items from the April call to keep in mind ahead of tonight’s Q2 earnings:

Last Quarter’s Top 3 Takeaways:

• Capital return posture flipped back to normal. After walking away from the Warner Bros. deal, Netflix booked a $2.80 billion termination fee and resumed buybacks, repurchasing 13.5 million shares for $1.3 billion with $6.8 billion remaining. With shares now near $74.26, pace-of-buyback commentary matters more than usual.
• The ad tier inflected faster than the Street modeled. Ad-supported plans drove over 60% of sign-ups in ads countries, the advertiser base grew over 70% year over year to more than 4 thousand advertisers, and management reiterated the $3 billion ad revenue target. Any wobble tonight would dent the core bull thesis.
• Q2 is the margin trough, by design. Content amortization was flagged to peak in Q2 before decelerating to mid-to-high single digits in the back half, with the Q2 operating margin guide set at 32.6% on revenue of roughly $12.574 billion. FCF guidance was also raised to ~$12.5 billion from $11 billion, so any print above the 32.6% line would signal Q1’s confidence was, if anything, understated.

Prediction markets currently assign a 60.5% probability of a miss, with 66.5% clustering around a 32%-34% operating margin outcome.

Netflix (NASDAQ: NFLX) heads into tonight’s earnings report with Wall Street and prediction markets telling two very different stories.

The company is targeting roughly $12.57 billion in second-quarter revenue and a 32.6% operating margin, even as content amortization is expected to peak during the quarter.

Advertising remains the clearest potential catalyst, with ad revenue reportedly on track to double to approximately $3 billion in 2026.

Wall Street analysts maintain an average price target of $112.17, implying 51.5% upside. However, prediction markets assign Netflix a 60.5% probability of missing expectations, with $70 emerging as the most likely post-earnings share price.

A clean beat on advertising revenue and operating margin would revive Netflix’s long-term compounding narrative, but weakness in either metric would strengthen the bear case.

Netflix is also looking to overcome concerns that audiences for viral shows can decline 30% to 70% between seasons.