NEW YORK, July 22, 2026, 11:12 EDT.
Netflix, Inc. NASDAQ:NFLX shares rose 2.2% to $70.15 at 10:58 a.m. EDT. U.S. markets remained open, while the main indexes were mixed.
The gain puts a record buyback at the center of the investment case. Netflix repurchased $4.7 billion in the second quarter, versus $1.53 billion of free cash flow.
That gap is the investor angle. Repurchases equaled 3.1 times quarterly free cash flow, based on company figures.
Net income rose 8.8% from a year earlier. Diluted earnings per share rose 11.1%. The spread coincided with a 2.0% fall in diluted shares.
The arithmetic shows where the per-share support comes from.
| Measure | Latest reading | Comparison |
|---|---|---|
| Q2 revenue growth | 13.4% | Q1: 16.2%; Q3 company forecast: 11.7% |
| Q2 net-income growth | 8.8% | Diluted EPS growth: 11.1% |
| Q2 diluted shares | 4.261 billion | Down 2.0% year over year |
| Q2 repurchases | $4.7 billion | 3.1 times Q2 free cash flow |
| Remaining authorization | $27.1 billion | 9.1% of market value, estimate |
| 2026 free-cash-flow forecast | About $12.5 billion | 4.2% of market value, estimate |
Company data come from Netflix’s second-quarter letter. Market-value ratios are calculated estimates using Wednesday’s intraday quote.
The remaining authorization exceeds twice the full-year cash-flow forecast. Netflix still expects about $12.5 billion of 2026 free cash flow. That equals a 4.2% yield on Wednesday’s market value.
Chief Financial Officer Spence Neumann said there was “no change to our capital allocation philosophy.” He called Q2 the company’s largest repurchase quarter.
Capital returns do not erase the revenue slowdown. Netflix forecast third-quarter sales of $12.86 billion, up 11.7%. Wall Street had expected $13 billion.
Advertising is the clearest offset, but it remains small. Netflix expects about $3 billion of ad revenue this year. That is 5.9% of the $51.2 billion revenue-range midpoint.
Co-CEO Greg Peters said ad-tier revenue per member still trails the standard plan. He said the gap is narrowing as demand and fill rates improve.
Paolo Pescatore of PP Foresight called the outlook a “naturally maturing growth profile.” He said high expectations leave Netflix with less room for error. Reuters
The valuation premium is still wide. On Friday, Netflix traded near 20 times forward earnings. Walt Disney NYSE:DIS stood at 13.5 times, while Comcast NASDAQ:CMCSA was 6.6 times.
Risks include weaker ad growth, rising content costs and buybacks above cash generation. Less frequent viewing data may also raise the discount investors demand.
For now, the stock’s rise reflects a cash-return cushion, not faster growth. The next test is whether ads and pricing sustain cash flow through Q3.
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