Netflix Shares Drop After Soft Revenue Guidance

Shares of Netflix dropped approximately 9% in after-hours trading, reaching a 52-week low of $67.97 following the release of its second-quarter 2026 report. While the company reported revenue of $12.6 billion, a 13% year-over-year increase, and earnings per share of $0.80, the stock declined primarily due to a third-quarter revenue guidance of $12.86 billion, which fell roughly $140 million below analyst expectations.

Management narrowed the full-year revenue outlook to between $51.0 billion and $51.4 billion. To address a growth rate that has declined every quarter this year, the company is pivoting toward advertising and live programming. Netflix aims to double advertising revenue to $3 billion this year and is reportedly planning to bid for the 2030 and 2034 FIFA World Cup rights to supplement its existing agreement with the NFL.

Co-CEO Greg Peters noted that viewing hours do not always move in lockstep with financial results, while Co-CEO Ted Sarandos disputed reports that viewership for second seasons of original series has been declining. Additionally, the company announced it will shift engagement reporting from a semiannual to an annual release starting in 2027. In other corporate developments, Netflix completed a record quarterly share repurchase of $4.7 billion in the second quarter.