Key facts
- Netflix reported Q2 revenue of $12.56 billion and EPS of 80 cents, narrowly beating analyst expectations.
- The company forecasts Q3 revenue and EPS below Wall Street targets.
- Netflix will stop releasing its "What We Watched" report twice a year, opting for an annual release.
- Netflix shares dropped 8% following the earnings report and disclosure changes.
Netflix shares fell 8% after the company announced it would reduce its disclosures of viewing data, a move that comes as the streaming giant forecasts third-quarter revenue and earnings per share below Wall Street expectations. The company reported second-quarter revenue of $12.56 billion and EPS of 80 cents, which narrowly beat analyst targets. However, Netflix stated its intention to stop releasing its "What We Watched" report twice a year, opting instead for an annual release. This decision aims to shift Wall Street's focus from engagement metrics to financial performance, such as revenue and operating profit. The company previously changed its subscriber data reporting from quarterly to annually in April 2024, citing similar reasons. Despite becoming less transparent, Netflix still leads its competitors in data provision. The shift in disclosure strategy is seen by some as a response to concerns about declining subscriber engagement, with reports highlighting a steep drop-off in viewership for some of Netflix's biggest shows in their second seasons. Netflix maintains that the quality of engagement is more important than sheer volume and that its engagement numbers are strong. The stock has performed poorly year-to-date, down 40%, partly due to investor concerns about its previous potential acquisition of Warner Bros. Discovery.