Netflix reported Q2 2026 revenue of $12.56 billion, up 13% year-over-year (12% F/X neutral), with operating income of $4.19 billion and an operating margin of 33.4%. Net income for the quarter was $3.40 billion and diluted EPS was $0.80; the company narrowed its 2026 revenue outlook to $51.0–$51.4 billion and reiterated a 31.5% operating margin target. Management highlighted continued membership and ad-revenue growth, expanded content formats and AI initiatives as drivers of performance.

Financial Highlights

  • Revenue: $12,559.9 million for Q2 2026, +13% year-over-year (+12% F/X neutral).
  • Operating income: $4,192.6 million for Q2 2026; operating margin: 33.4% (Q2'25: 34.1%).
  • Net income: $3,401.4 million for Q2 2026.
  • Diluted EPS: $0.80 for Q2 2026.
  • Free cash flow: $1,525.2 million for Q2 2026; company continues to expect ~ $12.5 billion FCF for full-year 2026.

Business Highlights

  • Membership and monetization drivers: Revenue growth attributed to membership growth, pricing changes and increased ad revenue; ads business expected to roughly double to ~$3 billion in 2026.
  • Content engagement and slate: View hours up 2% in H1 2026 vs. H1 2025 with strong global hits including Swapped, Apex and I Will Find You; non-English content drove over one-third of viewing in the period.
  • New formats and partnerships: Expanded offerings include video podcasts, creator-led content (e.g., Danny Go!, Salish & Jordan Matter) and partnerships with publishers (Condé Nast, Hearst, People); TF1 integration launched in France providing linear and on-demand content to subscribers.
  • Games and cloud TV: Early traction in cloud-based TV games with successful debuts (FIFA World Cup: Launch Edition, Unhinged) and 3x growth in daily players for Netflix Playground since April; kids mobile games engagement up 600% year-over-year.
  • Technology and AI: Increased use of LLMs and GenAI across product and production — GenAI workflows used in ~300 titles in 2026 for post-production and creative efficiencies; AI tools expanded across the advertising lifecycle and search improvements introduced (voice and natural language).

Original SEC Filing:

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