Netflix Exceeds Profit Expectations but Disappoints with Weak Outlook

At the same time, however, the company issued cautious growth forecasts for the second half of the year. For the current quarter, Netflix is forecasting revenue of 12.86 billion US dollars, corresponding to growth of just under 12 percent, as well as earnings of 0.82 US dollars per share. Jochen Stanzl, chief analyst at Consorsbank, commented on market sentiment with the words: «Einfach nur die Erwartungen zu erfüllen, scheint zu wenig. Nur ein sehr positiver Soll-Ist-Abgleich zählt - aber auch nur, wenn die Anleger auch im Ausblick kein sprichwörtliches Haar in der Suppe finden.»

Viewing Behavior and Subscriber Loyalty

The 325 million subscribers spent around 97 billion hours on the platform in the first half of the year, although that is only 2 percent more than in the first half of 2025. Each of the roughly 325 million subscribers thus spends more than 300 hours per half-year with Netflix. To date, Netflix has by far the lowest «churn rate» of any streaming provider, meaning that users remain loyal to the provider longer than, for example, Disney+ or Apple TV+.

The Winter Olympics and the Football World Cup, as Netflix also mentioned, certainly helped keep television viewers away from the streaming offering. Previously, Netflix reported quarterly on how subscriber numbers were developing. Since growth has stalled, this data is no longer routinely shared with the quarterly report.

Live Programming: High Effort, Low Impact

In the past half-year, Netflix invested 5 percent of its content spending in live programming. In the past half-year, this included, for example, boxing matches; in January, Netflix also broadcast live as an extreme climber in Taiwan ascended one of the world's tallest skyscrapers without safety equipment. However, these programs only contributed about 1 percent of the hours users spent with Netflix.

was, for example, the thriller series «I Will Find You» the most successful new Netflix original, with 87 million views. Instead of semi-annually, these figures are now only published annually. Netflix plans to release viewership numbers for films and series only once a year going forward instead of twice.

Ad Revenue and Free Offering as New Pillars

For the latter, according to Greg Peters, co-chief of Netflix, there is no concrete plan yet. In a conversation with analysts, he warned that such a model could cannibalize the company's own paid offering. The company could perhaps even test an ad-supported free offering in certain countries and is placing greater emphasis on ad revenue and video games as additional sources of income alongside subscription fees.

When Netflix announced on February 27 that it was withdrawing from the heated bidding war for the major film studio Warner Bros. Discovery, the streaming giant's stock shot up 14 percent. However, the stock had already lost more than 40 percent of its value in the months prior.

Market Environment: Tech Sell-Off and Oil Prices

The Netflix quarterly figures came amid broader market turbulence. Signs of fatigue are increasingly becoming apparent on the stock market, and at least the positive momentum of the first half of the year is now fading for the time being, said Andreas Lipkow, chief analyst at broker CMC Markets. A global sell-off in tech stocks weighed on stock exchanges worldwide.

Japan's Nikkei index plunged 3.6 percent to 64,443 points, the broader Topix lost 2.0 percent to 3,950 points. Semiconductor stocks came under particular pressure: the sector index fell 4.3 percent, Kioxia Holdings lost 16.1 percent, Taiyo Yuden 15.5 percent, and Screen Holdings 11.5 percent. The market appears to be torn back and forth by high earnings expectations for semiconductor-related companies, explained analysts at Sony Financial Group.

Indices in the US and Europe also showed weakness: the Dow Jones closed 0.2 percent lower at 52,553 points, the Nasdaq lost 1.5 percent to 25,882, and the S&P 500 gave up 0.5 percent to 7,534 points. Germany's DAX closed 0.3 percent lower at 24,915 points; in pre-market trading, broker IG priced the DAX at minus 0.6 percent at 24,770 points.

In parallel, escalating tensions in the Middle East and new US attacks on Iranian targets drove oil prices to their biggest weekly gain in three months. North Sea Brent rose 0.8 percent to 84.86 US dollars per barrel, while US WTI added 0.9 percent to 79.65 US dollars. Both crude oil grades are heading for a weekly gain of more than eleven percent.