Netflix Q2 revenue jumps 13% YoY; eyes $3B in ad revenue for 2026

"Netflix reported Q2 2026 revenue of $12.6 billion, up 13.4% year-on-year, driven by continued membership growth, higher pricing, and increased advertising revenue. Net income for the quarter stood at $3.4 billion. The streaming giant posted double-digit revenue growth across all regions, with quarterly revenue crossing $4 billion in EMEA and $1.5 billion each in Latin America (LATAM) and Asia-Pacific (APAC) for the first time. On the advertising front, Netflix reiterated that it remains on track to generate approximately $3 billion in advertising revenue in 2026. The company said its U.S. upfront negotiations are in advanced stages, with advertiser commitments expected to close in the coming weeks. The company attributed the growth of its advertising business to a combination of a strong and diverse content slate and continued investments in AI-powered ad tools and workflows, the Netflix Ads Suite, and broader programmatic advertising capabilities, aimed at making its ad platform more effective for marketers. It also reported strong interest from marketers in its growing slate of live programming, including the 2027 FIFA Women's World Cup, an expanded lineup of NFL games, as well as WWE and MLB events. In its shareholder letter, Netflix said the entertainment industry remains "dynamic and competitive" and that it plans to stay ahead by focusing on three strategic priorities: delivering greater entertainment value, leveraging technology to improve every aspect of its service, and strengthening monetisation. Alongside its strong financial performance, Netflix highlighted growing engagement across its content, gaming, and advertising businesses. According to the company's latest biannual "What We Watched" report, members watched more than 97 billion hours of content in the first half of 2026, a 2% year-on-year increase, improving on the 1.5% growth recorded during the same period last year. Netflix said the growth came despite competition from major global sporting events such as the Winter Olympics and the FIFA World Cup. The company added that non-English content accounted for more than a third of total viewing, with standout performances from titles originating in Korea, Japan, Spain, and India. Netflix also announced that it will shift to publishing the "What We Watched" report annually, beginning in the first quarter of 2027, instead of releasing it twice a year. Explaining the decision, the company said separating the report from its quarterly earnings would help keep the focus on its primary financial metrics, including revenue and operating profit. It will, however, continue publishing its weekly Top 10 rankings for films and series across more than 90 countries, along with title-level and overall viewing hours. Netflix said members watched more than 97 billion hours of content between January and June 2026, marking the platform's highest-ever viewing for a six-month period across a wide range of genres and languages. India also recorded its highest-ever viewing for a half-year on the platform. Among the standout titles were Dhurandhar, which garnered 37 million views to become the most-watched non-English film in the report, followed by Accused (19 million views), Made in Korea (18 million views), and Taskaree: The Smuggler's Web Season 1 (16 million views). Beyond streaming, Netflix said its cloud-based TV gaming business is gaining traction. June marked the company's two biggest cloud gaming launches to date with FIFA World Cup: Launch Edition and Unhinged. Meanwhile, Netflix Playground, its app for children's games, has seen threefold growth in daily active players since its launch in April and has contributed to a 600% year-on-year increase in engagement with Netflix's kids mobile games. Netflix crossed 325 million paying subscribers in April and said it believes there is still considerable headroom for membership growth. Looking ahead, Netflix expects Q3 revenue to grow 12% (11% on a foreign exchange-neutral basis), supported by continued gains in memberships, pricing, and advertising revenue. The company also forecasts an operating margin of 33.2%, up from 28.2% in the same quarter last year. For the full year, Netflix maintained its 2026 outlook while narrowing its revenue guidance to $51.0-$51.4 billion, representing 13-14% annual growth (around 12% on an FX-neutral basis). The company expects this growth to be driven by memberships and pricing, alongside an approximately twofold increase in advertising revenue to about $3 billion."