Netflix continued to see growth in the second quarter despite concerns that the company needs to do more to keep subscribers interested in its programming.

The company reported second-quarter revenue of $12.56 billion, up more than 13% from the same period a year earlier. Net income rose almost 9%, to $3.4 billion. The results were roughly in line with analysts' expectations.

Netflix attributed the gains in part to recent price increases and growth in advertising.

Still, the streamer's stock is down more than 40% over the past year, a signal that investors are concerned about the company's growth path. The decline started when Netflix was exploring a bid for Warner Bros. Discovery's studio and streaming service -- a departure in strategy for the company. It has continued to fall even after Netflix lost out on the acquisition.

Netflix said Thursday that viewers watched more than 97 billion hours of content on its service in the first half of 2026, up 1.5% from the second half of 2025 and 1.9% from the first half of last year.

Netflix executives have been focused on finding ways to get subscribers to spend more time on its service. Such measures are crucial to streamers as they signal that customers are satisfied and less likely to cancel their subscriptions.

Netflix's churn -- the rate at which customers cancel -- is by far the best in the industry at 2.11% for June, according to research firm Antenna.

Over the last quarter, some of the streamer's most popular debuts included Harlan Coben's "I Will Find You," and the second season of "Beef."

The company said Thursday that it will shift to an annual release of its "What We Watched" report, which details how much time viewers spent watching its shows and movies. Until now, it had released that biannually.

Netflix said subscriber growth helped contribute to the quarter's strength; it stopped releasing quarterly subscriber counts early last year. Last week, it began testing free trials for people who had never subscribed in a number of markets around the world.

"Overall, our engagement remains healthy and as with all things we do, we're working hard to improve every day," the company said in its letter to shareholders.

To bolster engagement, executives have recently discussed adding live channels that would continuously stream certain programs, or shows and films from a certain genre, as well as bundling offering with other streaming services, The Wall Street Journal previously reported.

Netflix also has been adding video podcasts to its service and continues to look for live sports and events to add to its service. The company said that it expects live events to make up 5% of its content budget this year.

The company's operating margin retracted to 33.4% in the second quarter, from 34.1% a year earlier -- but still higher than the 32.6% it projected. Free cash flow fell to $1.53 billion in the second quarter, from $2.27 billion a year earlier, owing in part to tax payments from its Warner termination fee.

Netflix narrowed its revenue forecast for the year to between $51 billion and $51.4 billion. It previously forecast revenue in the range of $50.7 billion to $51.7 billion. The company continues to expect an operating margin of 31.5% for the year.

Write to Jessica Toonkel at jessica.toonkel@wsj.com

(END) Dow Jones Newswires

July 16, 2026 16:01 ET (20:01 GMT)

Copyright (c) 2026 Dow Jones & Company, Inc.