Netflix earnings put ads, viewing habits and deal talk in the hot seat
Netflix reports second-quarter results Thursday, with Wall Street watching ad growth, engagement trends and possible acquisition chatter.
By Sal Moretti · Money Reporter
3 min read
Netflix heads into its second-quarter earnings report with Wall Street staring at three big questions: how fast its ad business is growing, whether viewers are sticking with its shows, and whether the company still has an appetite for deals.
The streaming company is scheduled to report results after the market closes Thursday and hold an analyst call at 4:45 p.m. ET, CNBC reported.
Analysts surveyed by LSEG expect Netflix to post earnings of 79 cents per share on revenue of $12.59 billion for the quarter ended June 30, according to CNBC.
Ads are back in the spotlight
Investors are expected to focus closely on Netflix’s lower-priced, ad-supported subscription plan, CNBC reported. The advertising push has become a bigger part of the streaming story as subscriber growth across the industry has cooled in recent years.
Netflix said earlier this year that it was on pace to bring in $3 billion in advertising revenue in 2026, CNBC reported. That would be twice its ad revenue from the prior year.
The ad tier is one of several business moves Netflix has leaned on since 2022, when the company reported its first subscriber loss in more than a decade, according to CNBC. The company also cracked down on password sharing after that setback.
Deal chatter has not gone quiet
Netflix is also likely to face questions about mergers and acquisitions as the wider media business goes through consolidation, spinouts and heavier competition, CNBC reported.
Late last year, Netflix pursued Warner Bros. Discovery’s film and streaming assets before walking away from the potential transaction, according to CNBC. That move fed speculation about whether Netflix may look at other media assets.
CNBC reported that the broader media business remains under pressure as streaming reshapes the old pay-TV model and tech platforms, including Google’s YouTube and TikTok, take more viewing time from traditional media.
Netflix management said earlier this year, while defending its interest in assets from Warner Bros. Discovery, that the company was dealing with intense competition across a wide range of viewing options, CNBC reported.
Viewers, content and the stock slide
Netflix still has a big lead in paid memberships. The company said in January that it had 325 million global paid members, according to CNBC.
Even so, investor worries have built around engagement after recent reports that viewing for Netflix series falls after the first season, CNBC reported.
KeyBanc analysts said in a Sunday report that current investor sentiment and concerns echo 2022, when Netflix’s subscriber loss pushed the company into new business initiatives, according to CNBC.
“This time around, we believe levers will likely center around content and product diversification that aid perceived content quality, and support better monetization per hour,” KeyBanc analysts said in the report, as cited by CNBC.
Netflix said in April that it expected second-quarter revenue to rise 13%, CNBC reported. The company also repeated its earlier warning that content spending would be heavier in the first half of the year because of the timing of releases, and said it expected content amortization growth to slow in the second half.
The stock has dropped about 40% over the past year, with the decline worsening after Netflix sought the Warner Bros. Discovery assets, CNBC reported.
This story draws on original reporting from CNBC.