Netflix Q2 profit beats, revenue misses; shares fall 7%

Netflix reported a second-quarter profit that beat analyst expectations. Revenue fell slightly short of estimates. Shares slid 7% in after-hours trading after the company's third-quarter revenue forecast missed Wall Street targets.

The Los Gatos-based company earned $3.4 billion, or 80 cents per share, in the April-June period, up from $3.13 billion, or 72 cents per share, a year earlier. Revenue grew 13% to $12.56 billion. Analysts had expected earnings of 79 cents a share on revenue of $12.58 billion, according to FactSet. Netflix attributed the growth to new membership signups and price increases. The price increases 'had gone well and as expected,' the company said.

For the current quarter, Netflix forecast revenue growth of about 12%. That was below the 13% analysts expected, which would have put revenue at $13 billion. The company cited seasonal patterns and the timing of content releases.

Netflix said its advertising business remains a top priority. The company expects to bring in about $3 billion in ad revenue this year. It also noted strong interest in live events, including the Women's World Cup.

On the content side, the animated film 'Swapped' is on track to become the second-most viewed original animated movie in Netflix history, behind last year's 'KPop Demon Hunters.' Other popular streams included Harlan Coben's 'I Will Find You,' 'Legends' from the U.K., 'The Polygamist' from South Africa and the K-drama 'Teach You a Lesson.'

Netflix is using large language models to improve content discovery. The company is adding voice search and AI-powered natural language search, it said.

In February, Netflix walked away from an offer to buy Warner Bros. Discovery's studio and streaming business. Warner Bros. Discovery, which carries an Alpha Score of 38 out of 100, has been restructuring its streaming operations. WBD stock page

Shares of Netflix fell $5.33 to $69.02 in after-hours trading.