Netflix's Post-Earnings Sell-Off Just Revealed Why It Was Bidding to Acquire Warner Bros. and Roku
Netflix's revenue growth is being driven by price increases rather than subscriber growth.
Overview
Netflix (NASDAQ: NFLX) was down 8.2% in after-hours trading on July 16 at 5:53 PM EDT -- falling to $68.23 per share as investors digested its second-quarter 2026 earnings and weak third-quarter guidance. The problem is abundantly clear -- most of Netflix's revenue growth is coming from price increases.
Netflix's third price increase in less than three years marked a 12.5% jump in U.S. ad-supported monthly pricing, an 11.1% boost in U.S. standard monthly pricing, and an 8% increase in U.S. premium monthly pricing. In its latest quarter, Netflix reported a 13.4% year-over-year increase in revenue and is guiding for a 11.7% year-over-year increase in third-quarter revenue. Which sounds good on paper, until you factor in the glaring reality that price increases are the majority of revenue growth.
Details
Here's what the results mean for investors, how they help paint the picture of why Netflix pursued major acquisitions, and if the growth stock is a buy now.
Source
Originally published at www.fool.com.