Netflix, Inc. · Q2 2026 call

we don't manage the business on a quarter-to-quarter basis. […] there is a little bit of quarter-to-quarter choppiness in growth because last year was more back-half weighted. That may be a little bit of what you see in the deceleration, but honestly, it's not what we manage to. We manage to the full year.

We're under 45% penetrated into addressable households around the world. It's roughly 800 million addressable households. We're capturing, we think, just 7% of addressable revenue market. It's about $670 billion of addressable revenue in the countries and categories in which we operate today. We estimate that we're only about 5% of TV view share globally.

there is not a linear relationship between view hours and revenue and profit, because all hours are not created equal. All hours don't provide the same kind of value to the business.

Live, we expect, will be 5% of our content budget this year, but we think that'll only be 1% of view hours. Having said that, six out of top 10 new member sign-up days over the past five years have come from live events.

view hours grew 2% in the first half of 2026. That's an incremental 1.5 billion hours relative to the same period last year. It's a slight acceleration compared to 1.5% growth in 2025.

the vast majority of our programming spend goes into the core TV series and film, where we have a really strong track record, more than a decade, of translating those investments into value for our members and returns for the business.

There isn't some hyper-acceleration of content investment. We grow the content spend slower than revenue, while we're continuing to invest in a huge addressable market. We're forecasting content expense up about 10% this year. It's a little higher than the 8% we averaged over the last five years, and below the 14% that we averaged over the past decade.

in aggregate, we are not seeing any material change in our second season viewing compared to Season 1s. […] Our Season 2 fall-off is actually slightly improved this year relative to last year, no changes in release strategies.

They drive disproportionate sign-ups, because of that acceleration, they can exhibit slightly higher churn. The results are exactly consistent with that trend and in line with our expectations and all of our modeling.

it's early in the TF1 partnership. We're literally four weeks in, there's a bunch that we'll learn through this process, but we are pleased with the performance we are seeing in that integration.

A free offering could make sense in some markets, we have to be thoughtful about cannibalization of paid tiers. […] That's all to say that free is something that we're going to continue to consider, but we have no near-term plans to launch something.

With the podcast, we're super encouraged with the viewing patterns that we're seeing. They have convinced us that this viewing is definitely incremental for us. We're seeing that in daytime viewing. We're engaging our members outside of prime time, where we historically have done most of the engagement on Netflix.

there's still a gap between ad tier ARM and then ARM for our standard without ads tier. That gap is narrowing, and I think of that gap as essentially near-term under-realized revenue growth.

Our first half price changes, these are markets like U.S., Mexico, Spain. They've gone well. The results are consistent with prior price changes. They're consistent with our expectations. We aren't seeing any real changes in that performance.

if you go to the U.S., and you take what Netflix subscribers are paying, they pay the least per hour of viewing compared to comparable SVOD offerings. In some cases, they would have to pay twice as much per hour for a competitive service. Our ads plan at $8.99 in the United States, we think is an amazing entry point.

we're testing free trials for non-rejoining new members in a number of countries.

since last October, eight months ago, when we really sort of scaled up this cloud initiative, monthly active players for cloud games have increased 11x and adoption is significantly ahead of that curve that we had for mobile games with even higher retention value.

We have the biggest, most engaged audience in the world. Creators and advertisers love that. We lead the industry in monetization.

GenAI workflows now have been used in roughly 300 of our titles, with the largest concentration to date is on post-production.

we believe it takes great artists to make something great, and AI is not changing that. AI will give creatives better tools to bring their visions to life. Movies are being made by people who make movies.

Our documentary series we just released called "The American Experiment," that series features 17 minutes of AI-enhanced footage. […] Those 17 minutes, Sean, they were produced twice as fast and at half the cost of previous options.

we're not going to comment on market speculation, but I'd like to take the opportunity to remind everyone about our core philosophy. […] As we've said, we're primarily builders, not buyers, and that remains the case today. […] Our track record is clear that we have a very high bar to do any big M&A.

in Q2, we repurchased $4.7 billion of our shares this quarter. That's our largest quarter of share repurchase in our history, and we still have about $27 billion of capacity on our remaining authorizations.