Netflix's stock fell to a 52-week low on Thursday after the company reported second-quarter earnings, extending a selloff that has seen shares lose about 44% of their value since June. The streaming service reported revenue of $12.56 billion, a 13% increase year over year, but slightly below analysts' expectations of $12.58 billion. The operating margin also decreased to 33.4%, down from 34.1% in the same period last year.
Key Details
The company's forecast for third-quarter revenue is $12.86 billion, which is below Wall Street's estimate of approximately $13 billion. Netflix also updated its full-year revenue outlook to between $51 billion and $51.4 billion, maintaining its target operating margin of 31.5%. Additionally, Netflix announced it would reduce the frequency of its viewing-hours transparency reports.
Background
Shares closed at $74.35 on Thursday, up 1% for the day but down significantly from their all-time high of $132.80 in June 2025. Following the earnings report, shares fell another 8% to 9% in after-hours trading. Despite the downturn, Netflix executed a record $4.7 billion stock buyback during the quarter, indicating management's belief in the company's long-term value. Eric Clark, portfolio manager at Accuvest Global Advisors, noted that the buyback sends a positive signal about Netflix's prospects, stating,
I think it's a sign management sees long-term value in the business.
Related coverage: Netflix shares plunge 44% amid slowing growth concerns.
The decline in Netflix's stock could affect investor sentiment in the streaming sector and related tech stocks, particularly those reliant on subscriber growth. The company's disappointing guidance may lead to further scrutiny of similar firms in the industry.
Watch for Netflix's upcoming third-quarter earnings report, scheduled for October, which will provide further insights into its performance and outlook amid ongoing market concerns.