Shares of Netflix Inc (Nasdaq: NFLX) are down more than 11% in premarket trading on Friday following an earnings report that came close to Wall Street’s expectations but also announced plans to reduce engagement transparency.
Released on Thursday, July 16, the streamer’s second-quarter earnings report revealed $12.56 billion in revenue, a 13% increase year-over-year (YOY). Netflix attributed the double-digit growth to increased ad revenue, membership growth, and pricing.
Price hikes ‘going well’
Netflix raised its prices in late March, with the cheapest option (standard with ads) now costing $8.99 per month. In a post-earnings call, Netflix CFO Spencer Neumann simply stated that the price adjustments are “going well.”
Despite its growth, Netflix’s revenue just missed Wall Street’s predicted $12.59 billion, while slightly surpassing estimates of 79 cents per share with 80 cents per share, according to consensus estimates cited by CNBC.
Alongside its results, the company announced a smaller forecasted revenue range for 2026. It has narrowed from between $50.7 billion and $51.7 billion to $51 billion and $51.4 billion.
Fewer ‘What We Watched’ reports
Moving forward, it will take longer to know people’s viewing habits on Netflix.
The company has announced that its What We Watched report will come just once a year, during the streamer’s first quarter. It had been a biannual report, with the latest edition published alongside quarter two’s financial report.
“The goal of separating the publication of the report from our earnings results is to keep the focus on our primary financial metrics—revenue and operating profit,” Netflix stated in its report. “With the change, we will still report industry-leading title-by-title and total view hours data.
“There is not a linear relationship between view hours and revenue and profit because all hours are not created equal,” Netflix co-CEO Greg Peters said in the post-earnings call. “All hours don’t provide the same kind of value to the business and a really great example of this is live programming.”
The shift follows Netflix’s decision to stop sharing its subscriber numbers in early 2025.
Peters further pointed to the impact of its live broadcasts—you know, the thing streamers tried to replace—stating that six of the company’s top 10 new signup days over the last five years have followed live events.
However, he added that live shows are expected to make up 5% of the company’s budget but only 1% of its viewing hours.
As of Thursday’s close, Netflix stock has fallen more than 41% YOY and over 20% year-to-date.