Netflix earnings to test ad growth and investor concerns on viewing
Netflix reports second-quarter results Thursday, with Wall Street watching ads, engagement and any signal on dealmaking.
By Hana Yoshida · Markets Reporter
3 min read
Netflix is scheduled to report second-quarter earnings after the market closes Thursday, giving investors a fresh read on its advertising business and viewing trends. The update comes as CNBC has reported that media companies are dealing with consolidation, spinouts and tougher competition for audience time.
Analysts surveyed by LSEG expect Netflix to report earnings of 79 cents a share on revenue of $12.59 billion for the quarter ended June 30. Netflix has said it will hold a call with analysts at 4:45 p.m. ET Thursday.
Wall Street’s focus is expected to include Netflix’s lower-priced ad-supported plan. CNBC has reported that advertising has become a larger revenue priority for media companies as streaming subscriber growth has slowed in recent years.
Netflix said earlier this year that it was on pace to generate $3 billion in advertising revenue in 2026, which the company said would be twice its ad revenue from the prior year. Investors will be looking for any update on whether that target remains on track.
Deal questions follow Warner Bros. Discovery approach
Netflix also faces questions about whether it wants to pursue acquisitions after its past interest in Warner Bros. Discovery assets. CNBC reported that Netflix made a bid late last year for Warner Bros. Discovery’s film and streaming business before walking away from the potential transaction.
The approach prompted speculation about whether Netflix may look at other assets, according to CNBC. Netflix management, while defending its interest in the Warner Bros. Discovery assets earlier this year, said the company faced strong competition across a wide range of viewing options, CNBC reported.
CNBC has reported that the broader media business has been unsettled as streaming has damaged the traditional pay-TV model and tech platforms such as YouTube and TikTok have taken more viewing time from older media formats. Those shifts have added pressure on companies to assess their streaming scale, content spending and distribution strategy.
Engagement and content spending in focus
Netflix remains well ahead of other streaming companies by paid membership count. The company said in January that it had 325 million global paid members.
Even so, investors have raised concerns about engagement after recent reports that viewing for Netflix series falls after first seasons, according to CNBC. A KeyBanc report this week said the current mood among investors echoes 2022, when Netflix reported its first subscriber loss in more than a decade and then accelerated efforts including its ad tier and password-sharing crackdown.
“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 a Sunday report.
Netflix said in April that it expected second-quarter revenue to rise 13%. The company also repeated at the time that content spending would be more heavily weighted to the first half of the year because of release timing, and said it expected content amortization growth to ease in the second half.
Netflix shares have fallen about 40% over the past year, with CNBC reporting that the decline deepened after the company sought to acquire Warner Bros. Discovery assets. Thursday’s results will give investors a chance to measure whether ad growth, engagement and spending plans are enough to address those concerns.
This story draws on original reporting from CNBC.