Netflix NFLX is slated to report second-quarter 2026 results on July 16.
For the second quarter, Netflix expects revenues of $12.57 billion, indicating growth of 13.5% year over year.
The Zacks Consensus Estimate for second-quarter revenues is pegged at $12.57 billion, indicating growth of 13.5% year over year.
On the profitability front, the company projects second-quarter operating margin of 32.6%.
The consensus mark for earnings is pegged at 79 cents per share. The estimate has remained unchanged over the past 30 days.
NFLX Estimate Movement
Image Source: Zacks Investment Research
NFLX’s Earnings Surprise History
In the last reported quarter, the company delivered a negative earnings surprise of 7.89%. The company’s earnings beat the Zacks Consensus Estimate twice in the trailing four quarters while missing the same twice, the average negative surprise being 4.79%.
Netflix, Inc. Price and EPS Surprise
Netflix, Inc. price-eps-surprise | Netflix, Inc. Quote
Earnings Whispers for NFLX
Our proven model does not predict an earnings beat for Netflix this time around. The combination of a positive Earnings ESP and a Zacks Rank #1 (Strong Buy), 2 (Buy) or 3 (Hold) increases the odds of an earnings beat. You can uncover the best stocks to buy or sell before they are reported with our Earnings ESP Filter.
NFLX has an Earnings ESP of 0.00% and a Zacks Rank #3 at present. You can see the complete list of today’s Zacks #1 Rank stocks here.
Factors Shaping Upcoming Results of Netflix
Content amortization growth is expected to have peaked in the second quarter, marking the highest year-over-year rate for the year before decelerating to mid-to-high single-digit growth in the back half of 2026. Despite this front-loaded cost structure, Netflix maintained its full-year revenue outlook of $50.7-$51.7 billion and its 31.5% operating margin target. Free cash flow guidance for 2026 was raised to approximately $12.5 billion, up from the previous $11 billion estimate, largely reflecting the after-tax benefit of the termination fee Netflix received after stepping away from its pursuit of Warner Bros. Discovery.
Pricing and content investment remained central swing factors entering the quarter. Netflix raised U.S. subscription prices across all tiers in late March, with the increases taking effect for new members immediately and rolling out to existing members through the second quarter based on individual billing cycles — meaning the bulk of the pricing benefit was expected to show up in April-June results rather than the first quarter.
On the content side, Netflix continued to lean into live and event programming, launching an exclusive FIFA World Cup: Launch Edition video game on June 11 to coincide with the tournament’s kickoff and adding a daily version of a football talk show featuring prominent pundits for the duration of the Cup. The period also included returning franchise titles and a steady slate of scripted originals, sustaining engagement levels even as content amortization costs ran at their heaviest point of the year.
Advertising remained a key growth lever heading into the print. At its May 13 Upfront presentation, Netflix disclosed that its ad-supported tier had reached more than 250 million global monthly active viewers, up from 190 million months earlier, with over half of new sign-ups now choosing an ads plan. Management reiterated its target of roughly doubling 2026 ad revenues to about $3 billion and unveiled new monetization tools, including an Audience Insights API and a Reach Curve API for campaign forecasting, alongside expanded data-clean-room partnerships and programmatic buying access for pause ads and live programming. Netflix also confirmed plans to extend its ad tier into 15 additional international markets starting in 2027, a move expected to broaden the long-term advertiser base even though the near-term revenue contribution from that expansion was likely limited.
Taken together, second-quarter results are likely to be shaped by a mix of favorable and cost-heavy dynamics: stronger pricing realization and a scaling advertising business on one hand, and peak content amortization growth alongside a board-level leadership change on the other. Given the offsetting nature of these factors, investors appeared likely to weigh Netflix’s execution on margin guidance and advertising momentum against rising content costs and competitive pressure from streaming rivals, including Apple AAPL, Amazon AMZN and Disney DIS, among others.
Top-Line Growth Estimates for Q2
The consensus mark for second-quarter 2026 Asia-Pacific revenues is pegged at $1.51 billion, indicating 16.4% growth from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for Latin America revenues is pegged at $1.5 billion, suggesting a rise of 15.1% from the figure reported in the previous quarter.
Moreover, the consensus mark for EMEA revenues is pegged at $4.04 billion, suggesting an increase of 14.2% from the figure reported in the year-ago quarter.
The Zacks Consensus Estimate for the United States and Canada revenues is pegged at $5.5 billion, indicating a 11.6% rise from the figure reported in the year-ago quarter.
NFLX Price Performance & Stock Valuation
Shares of Netflix have plunged 17.2% in the year-to-date period compared with the Zacks Consumer Discretionary sector’s decline of 7.6%. Amazon and Apple’s shares have returned 5.1% and 13.5%, respectively, while Disney has declined 12.6% in the same time frame.
Netflix Underperforms Sector, Peers
Image Source: Zacks Investment Research
Now, let’s look at the value Netflix offers investors at current levels. Currently, NFLX is trading at 6 times forward 12-month sales. Meanwhile, the Zacks Broadcast Radio and Television industry’s forward earnings multiple sits at 3.98 times. The company’s valuation looks somewhat stretched compared with its range and the industry average.
Price-to-Sales (Forward 12 Months)
Image Source: Zacks Investment Research
Investment Considerations: Balancing Risk and Reward
Netflix enters its second-quarter 2026 print with a mixed setup for investors. Management guided a 32.6% operating margin alongside peak content amortization growth. Given the stock’s premium valuation relative to streaming peers and intensifying competition from Apple, Amazon and Disney, the risk-reward appears balanced rather than compelling. Current shareholders may reasonably hold positions given Netflix’s durable growth drivers, but new investors could benefit from waiting for a more attractive entry point before initiating fresh exposure ahead of results.
Conclusion
Netflix’s balanced setup, entering second-quarter 2026 results, pairs pricing and advertising strength against peak content costs and governance transition. Given its premium valuation and mounting, current investors may hold positions, while prospective buyers might consider waiting for a more attractive entry point.
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Netflix, Inc. (NFLX) : Free Stock Analysis Report
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This article originally published on Zacks Investment Research (zacks.com).
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