Netflix reports second-quarter results after the close Thursday, a moment that has taken on outsized significance after the stock shed roughly 45 percent from its June 30 all-time high and erased $257 billion in market value. The shares now rank among the 20 worst performers in the S&P 500 over that span, and they have dropped 31 percent since mid-April when the company issued a weak forecast and announced that co-founder Reed Hastings would step down as chairman. The stock slipped another 0.3 percent in Thursday’s session ahead of the release.
The decline has accelerated as competitive pressures mount on multiple fronts. Meta Platforms said last month it is exploring new formats for its Instagram for TV platform, signaling deeper incursion into streaming. At the same time, movie theaters have staged a revival driven by surprise hits such as Backrooms and Obsessions, lifting shares of Cinemark Holdings, Imax Corp. and AMC Entertainment Holdings well above Netflix’s performance this year. The streaming pioneer has now fallen after each of its last four earnings reports, a pattern that has deepened investor anxiety.
“Right now, the idea of disruption is in the ether,” said Conrad Van Tienhoven, portfolio manager at Riverpark Capital, which holds Netflix shares. He cited third-party data showing lower engagement, the company’s decision to stop reporting subscriber numbers, and its new pursuit of acquisitions as a trail of breadcrumbs that explains the stock’s position. With Hastings no longer the public face, Van Tienhoven said the earnings call carries unusual weight in reshaping the narrative.
Engagement has become the focal point because it signals whether viewers are subscribing and staying. Netflix has struggled to keep audiences watching beyond a single season and has reportedly discussed adding live channels and bundling other subscription services to improve traction. “Trying to understand what they’re going to do to improve engagement moving forward is going to be key,” said Hanna Howard, a portfolio manager at Gabelli Funds. She added that a strong outlook would matter more for the shares than solid quarterly results, and noted that the failed pursuit of Warner Bros Discovery, which ultimately agreed to combine with Paramount Skydance, was seen as a potential answer to the engagement problem.
The company has since been linked to other deals. A Semafor report said Netflix lost out to Fox in a bid for Roku and was among suitors for Lionsgate, though Netflix denied interest in the latter. Independent research has reinforced the cautious tone. M Science warned in June that its data pointed to the weakest quarterly global net additions since 2022, with U.S. churn picking up to levels worse than those seen during the 2025 price increase.
Wall Street expects revenue to rise 14 percent to roughly $13 billion and earnings per share to climb 10 percent to 79 cents. Analyst sentiment remains overwhelmingly positive: 51 of the 64 analysts tracked by Bloomberg rate the stock a buy. The disconnect between that consensus and the price action means the market will judge the report not on the headline beat or miss but on whether management can articulate a credible path to re-accelerating engagement and justify the multiple that once made Netflix a market leader.