# Netflix (NFLX) Q2 2026 earnings

Results filed 2026-07-16 for the quarter ended 2026-06-30. Source page: https://earnings.opennash.com/companies/nflx/2026-q2/
Press release and exhibits: https://www.sec.gov/Archives/edgar/data/1065280/000106528026000211/0001065280-26-000211-index.htm
> Summaries and transcripts are machine-generated and can contain errors.

## In brief

Q2 revenue grew 13% year over year (+12% on a FX-neutral basis) to $12.6B, and operating margin was 33%, with diluted EPS of $0.80.

Netflix grew revenue 13% to $12.6B in the second quarter, driven by membership growth, pricing and advertising. Operating income was $4.2B and operating margin was 33.4%, slightly below 34.1% a year earlier because content amortization grew faster than revenue. Diluted EPS was $0.80. Free cash flow fell to $1.5B, partly on higher cash taxes tied to the Warner Bros. termination fee. Netflix also bought back a record $4.7B of stock.
Management expects Q3 revenue growth of 12% and an operating margin of 33.2%. It narrowed 2026 revenue guidance to $51.0-$51.4B and kept its 31.5% margin target. The main tension is that US and Canada growth slowed to 10% while content costs rise, so the margin target relies on slower amortization growth in the second half and on advertising roughly doubling to about $3 billion. Netflix will also stop publishing view hours with earnings.

## Key numbers

| Metric | Value | Change | Basis |
| --- | --- | --- | --- |
| Revenue | $12.6B | grew 13% year over year (+12% on a foreign exchange (F/X) neutral basis) | GAAP |
| Operating income | $4.2B | up 11% year over year | GAAP |
| Operating margin | 33.4% | versus 34.1% in Q2’25 | GAAP |
| Net income | $3,401,414 |  | GAAP |
| Diluted EPS | $0.80 | vs. $0.72 in Q2’25 (+11% year over year) | GAAP |
| Net cash from operating activities | $1.7B | vs $2.4B in the prior year period | GAAP |
| Free cash flow | $1.5B | vs. $2.3B in Q2’25 | non-GAAP |

## Segments and operating metrics

| Name | Value | Change |
| --- | --- | --- |
| UCAN revenue | $5,432 | Y/Y growth of 10% |
| EMEA revenue | $4,034 | Y/Y growth of 14% |
| LATAM revenue | $1,584 | Y/Y growth of 21% |
| APAC revenue | $1,510 | Y/Y growth of 16% |
| View hours, first half of 2026 | more than 97 billion hours | up 2% year over year |

## Outlook

| Metric | Period | Outlook |
| --- | --- | --- |
| Revenue growth | Q3 2026 | 12% |
| Operating margin | Q3 2026 | 33.2% |
| Diluted EPS | Q3 2026 | $0.82 |
| Revenue | 2026 | $51.0-$51.4B |
| Operating margin | 2026 | 31.5% |
| Free cash flow | 2026 | approximately $12.5B |
| Ads revenue | 2026 | approximately $3 billion |
| Content amortization growth | 2026 | ~10% |

## Key takeaways

1. **Revenue growth slowed to 13% in Q2** Q2 revenue was $12.6B, up 13% (+12% FX-neutral), versus 16.2% growth in Q1'26. All regions grew double digits.
2. **UCAN growth slowed to 10% before price change** UCAN revenue growth of 10% reflects only a partial quarter of the recent price change. EMEA grew 14%, LATAM 21% and APAC 16%.
3. **Margin dipped on front-loaded content amortization** Operating margin was 33.4% versus 34.1% in Q2'25. Management expects content amortization to grow slower in the second half and to rise ~10% for 2026.
4. **Cash flow fell while buybacks hit a record** Free cash flow was $1.5B versus $2.3B a year ago, including higher cash taxes tied to the Warner Bros. termination fee. Netflix repurchased $4.7B of stock and has $27.1B of capacity left.
5. **2026 outlook narrowed but not raised** Revenue guidance is now $51.0-$51.4B with a 31.5% operating margin, and ads are expected to reach approximately $3 billion. Netflix will publish its view hours report annually from 2027.

## Questions

**What were Netflix's Q2 2026 revenue and operating margin?** Revenue was $12.6B, up 13% year over year (+12% FX-neutral), and operating margin was 33.4% versus 34.1% in Q2'25. Operating income was $4.2B, up 11%.
**What is Netflix guiding for Q3 2026?** Netflix expects revenue growth of 12% (11% FX-neutral) and an operating margin of 33.2%, versus 28.2% a year earlier. The forecast table shows revenue of $12,860 million and diluted EPS of $0.82.
**Did Netflix change its full-year 2026 outlook?** It narrowed revenue guidance to $51.0-$51.4B, consistent with its prior forecast, and kept the 31.5% operating margin. It also still expects about $12.5B of free cash flow and about $3 billion of ads revenue.
**Why did free cash flow decline in Q2?** Free cash flow was $1.5B versus $2.3B in Q2'25. Netflix attributed this partly to higher cash tax payments, including tax related to the Warner Bros. termination fee.
**How much did Netflix return to shareholders in Q2?** Netflix repurchased $4.7B of stock, its largest quarter of buybacks. The board added $25B of authorization in April, leaving $27.1B of capacity.

## Slides and investor documents

- [Letter to Shareholders](https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/FINAL-Q2-26-Shareholder-Letter.pdf) (Shareholder letter)
- [Transcript](https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/Netflix-Inc-_Earnings-Call_2026-07-16T00_00_00_English-1.pdf) (Company's official transcript)
- [Financial Statements](https://s22.q4cdn.com/959853165/files/doc_financials/2026/q2/Q2-26-Website-Financials.xlsx) (Financial tables)
- [Video Interview](https://www.youtube.com/embed/qqGCRlldcXY?si=xbzfqyBkPV1oHnY5) (Document)