Netflix Inc. Scales Ad-Tier as Shares Drop 37 Percent

Netflix Inc. reported second-quarter FY2026 earnings per share of $0.80, exceeding analyst estimates despite a narrow miss in revenue. The company is aggressively scaling its ad-supported tier, reporting a 70 percent year-over-year increase in advertiser counts to over 4,000. Ad revenue is projected to double to $3 billion by the end of 2026.

Financial performance remains mixed as shares have declined 37.19 percent over the past year to $74.14. Free cash flow dropped 32.73 percent year-over-year to $1.53 billion, a dip that some analysts attribute to front-loaded content amortization. In a move to support shareholder value, the company executed its largest-ever quarterly share repurchase of $4.7 billion during the second quarter.

CEO Greg Peters sold $2 million in shares over a three-month period. Despite the stock's volatility, analysts at 24/7 Wall St. maintain a buy recommendation with a price target of $170.12. Full-year 2026 guidance projects total revenue between $51 billion and $51.4 billion with $12.5 billion in free cash flow.