NFLX · Q2 FY2026
NETFLIX INC Q2 FY2026 earnings analysis
By SageNoodle ResearchNeutral
| Metric | Actual | Estimate | Result |
|---|---|---|---|
| Revenue | $12.56B | $11.08B (yr ago) | Beat |
| EPS | $0.80 diluted | $0.72 diluted (yr ago) | Beat |
| Free Cash Flow | $1.53B | $2.27B (yr ago) | Miss |
| Gross Margin | Not disclosed | Not disclosed (yr ago) | Miss |
| Operating Margin | 33.4% | 34.1% (yr ago) | Miss |
What changed
Revenue increased 13.4% year over year to $12.56B and diluted EPS rose 11.1% to $0.80, while operating margin declined 0.7 percentage points to 33.4%. Free cash flow fell 32.7% to $1.53B because operating cash flow declined, including the effect of higher cash taxes partly associated with the Warner Bros. termination fee; management retained its approximately $12.5B full-year FCF forecast.
Impact on the investment thesis
There was no prior SageNoodle fair value to revise. We initiate fair value at $76 per share: the quarter preserved the 2026 revenue, margin and cash-flow outlook but did not provide enough upside to justify raising the valuation above the current price.