Netflix, Inc. (NFLX) Q2 2026 Earnings Call Transcript

Good afternoon, and welcome to the Netflix Q2 2026 Earnings Interview. I'm Spencer Wang, VP of Finance and Capital Markets. Joining me today are Co-CEOs, Ted Sarandos and Greg Peters; and CFO, Spence Neumann. As a reminder, we will be making forward-looking statements, and actual results may vary.

We'll now take questions submitted by the analyst community. We'll begin with a question on our guidance and our business outlook, and this question comes from Steve Cahall of Wells Fargo. What is the main driver of FX-neutral revenue growth slowing from 12% year-over-year in 2Q to 11% year-over-year as the guidance for the third quarter suggests. Spence, do you want to take that?

Yes, sure. Sure. Thanks, Steve. So look, we don't manage the business on a quarter-to-quarter basis. Our goal is to sustain healthy revenue and profit growth. We talked about that in our letter every quarter. We're guiding, as you say, to 12% revenue growth in Q3 reported, 11% FX neutral. The Q3 revenue drivers are very similar to Q2. It's primarily growth in our subscription revenue from increases in memberships and pricing and higher ads revenue. We continue to see healthy acquisition and retention trends on the membership side and our recent price adjustments are going well on the pricing side. Now recall, there is a little bit of quarter-to-quarter choppiness in growth because last