Netflix forecasts $12.57 billion in Q2 revenue, below investor expectations, as engagement concerns weigh on shares.
Netflix shares fell 22% year-to-date and 41% over the past month after executives expressed concerns about engagement metrics, including time spent watching and completion rates. The company reported $12.2 billion in Q1 revenue, up 16.2% year-over-year, with earnings surging 86% to $1.23 per share, aided by a $2.8 billion termination fee from Warner Bros. Discovery scrapping a prior deal.
For Q2, Netflix expects $12.57 billion in revenue, a 13.5% increase, which trails some analyst estimates. The company remains the leading streaming service by viewership and boasts the lowest churn rate, supported by $5 billion in Q1 free cash flow and a projected $12.5 billion by 2026.
Investors are eyeing Netflix’s valuation as a potential catalyst ahead of its July 16 earnings report, despite recent stock declines and strategic shifts, including plans to explore live TV channels.