Netflix is poised to report record revenue, as analysts see ad sales growth offsetting a drop in engagement

Netflix reports quarterly earnings on Thursday. The streaming platform's stock has dropped more than 40% over the past year.

A little more than a year ago, Wall Street crowned Netflix the winner of the streaming wars. But as the entertainment-industry giant prepares to report second-quarter results on Thursday, fresh debate has emerged over whether investors - and viewers - still see it that way.

Shares of Netflix $(NFLX)$ have tumbled 21.6% so far this year, as of Tuesday's close. While analysts generally like the growth in Netflix's ad sales, they're worried about signs that people are spending less time actually watching shows and movies on the platform, following price increases and higher competition from the likes of YouTube and short-form video.

The results will also arrive after the Wall Street Journal last week reported that the company was weighing introducing live channels and offering streaming-service bundles - including with NBC's Peacock - moves that wouldn't be so different from the cable TV industry that Netflix has upended over the past decade. According to Nielsen data cited by the WSJ, Netflix's share of TV viewership slipped to 7.8% in April, the lowest level in nearly a year.

"It seems silly to say Netflix is under siege given how successful their slate appears to be this year, especially abroad, but until they can definitively address the engagement question, it feels like shares may be stuck in neutral," Daniel Kurnos, an analyst at Benchmark Research, said in a research note on Thursday.

What to expect

Earnings: Analysts polled by FactSet expect Netflix to earn 79 cents a share, which would be a roughly 10% gain year over year.

Revenue: FactSet forecasts revenue of $12.58 billion, up 13.6% year over year and a potential record.

Stock: As of Tuesday's close, the stock had dropped 41.7% over the past 12 months, trading at nearly half the record closing price of $133.91 on June 30, 2025. The stock was sitting just 3.7% above a 20-month low hit just a little over two weeks ago.

What analysts are saying

Netflix's stock has suffered this year from the departure of co-founder Reed Hastings as well as its own efforts to get bigger. Its unsuccessful bid for Warner Bros. Discovery $(WBD)$ was seen by some as a sign of desperation to spur growth. Plans for increased spending on content have also worried investors, BofA analysts said in a note on Tuesday.

Those analysts said Netflix's most recent engagement report indicated that total viewing hours per subscriber have been declining year over year. Benchmark's Kurnos said that "third-party data signals suggested that engagement was already starting to see some cracks after the recent round of price hikes."

Netflix this spring raised prices for all of its plans, with its standard plan rising to $19.99 from $17.99. It was the second time the company had done so in two years, as it expanded into live entertainment and podcasts. On Aug. 3, short-form videos from BuzzFeed, Tastemade and other digital-media outlets will be available on Netflix.

Consumers, however, are still struggling with higher prices, although analysts played down the impact on Netflix when tariffs hit last year. Some analysts are concerned about disruptions from AI-generated content, even though consumers remain suspicious of it.

BofA analyst Jessica Reif Ehrlich, in a research note on Tuesday, said that Netflix had been in tough spots before, but had found ways to win investors back.

In 2022, for instance, after slowing subscriber growth in the U.S. tanked its stock, the company introduced ads and cracked down on password sharing to shore up the bottom line, even though viewers weren't always wild about the changes. When investors were concerned about margin expansion in 2023, Netflix nonetheless delivered, she said.

"We acknowledge these overhangs but note that Netflix has successfully navigated similar periods of skepticism," she said.

She added that Netflix remained a "must-have service" that was still building out its advertising engine. Given the stock's retreat over recent months, stronger-than-expected results, amid low expectations, "could go a long way in assuaging several of these investor concerns."

Wedbush analyst Alicia Reese said in a research note this week that, despite some concerns of an advertiser pullback, Netflix's ad business was getting better at targeting viewers more precisely. Those improvements, she said, along with better pricing power for ads aired during live sports events, could help double ad revenue in 2026 to around $3 billion.

She added: "The advertising ramp outweighs the engagement debate."

-Bill Peters

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July 15, 2026 07:36 ET (11:36 GMT)

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