Netflix Spends $5 Billion on Buybacks, Lifts 2026 FCF View to $12.5 Billion
Updated
Updated · The Motley Fool · Jul 26
Netflix Spends $5 Billion on Buybacks, Lifts 2026 FCF View to $12.5 Billion
2 articles · Updated · The Motley Fool · Jul 26
Summary
$5 billion in second-quarter repurchases marked Netflix's biggest quarterly buyback on record, and the company refreshed its authorization to $27 billion even after the stock fell 8% following earnings.
Free cash flow guidance rose to $12.5 billion from $11 billion, with management still targeting 13% to 14% revenue growth and a 31.5% operating margin as revenue outpaces content spending.
Engagement remains the key investor concern: Netflix said first-half viewing improved slightly, but its shift from semiannual to annual engagement reports added to scrutiny after it stopped disclosing subscriber metrics last year.
Competition for attention is intensifying, with Nielsen estimating YouTube at 13.5% of U.S. TV viewing versus about 8% for Netflix, while short-form video, podcasts, gaming and other streamers pressure viewing time.
Ad-supported growth offers one offset: the $8.99 plan is expected to help ad revenue roughly double to $3 billion in 2026, still only about 6% of revenue but with higher incremental margins.