# Netflix's $8.7bn first-half profit includes a $2.8bn break-up fee from the failed Warner deal — and Q2 buybacks of $4.7bn were 2.7 times operating cash flow

![Netflix's $8.7bn first-half profit includes a $2.8bn break-up fee from the failed Warner deal — and Q2 buybacks of $4.7bn were 2.7 times operating cash flow](https://aiswingx.com/static/covers/nflx-2026q2_cover.jpg?v=1790011749)

**Q2 2026 10-Q: revenue $12.56bn (+13%), operating margin 33.4%. The $2.8bn termination fee, paid by Paramount Skydance on Warner's behalf, sits in Q1 other income. Q2 cash spent on content rose 28% to $4.9bn and operating cash flow fell 28% to $1.7bn. Content obligations $25.1bn, of which $19.6bn is off the balance sheet**

Netflix (NFLX) reported revenue of $12,559.9m for the second quarter of 2026, up 13% from a year earlier, and net income of $3,401.4m. First-half net income was $8,684.2m — and Note 6 of the 10-Q filed in August says $2.8bn of that is a termination fee from the cancelled acquisition of Warner Bros. Discovery. The cash-flow statement shows a quarter in which content spending and buybacks exceeded operating cash.

- 종목: NFLX (Netflix)
- 분기: 2026Q2 · 10-Q
- 작성: 2026-09-21 17:29 UTC
- 원문: https://aiswingx.com/p/nflx-2026q2

## 숫자 하나
Termination fee $2.8bn = 32% of first-half net income of $8,684m. Q2 operating cash flow $1,744m (prior year $2,423m) vs buybacks $4,714m (52.9m shares). Cash spent on content $4,928m vs amortization $4,311m. Content obligations $25.1bn ($19.6bn off balance sheet).

## 비유 하나
(구독자 전용)

## 출처 하나
Netflix Form 10-Q for Q2 2026: statement of operations, cash-flow statement, Note 6 'Acquisitions' (WBD termination, $2.8bn fee; March acquisition $587m), content obligations note, stockholders' equity note (repurchases, $25bn April 2026 authorization), MD&A other income and liquidity

## 다음 분기에 볼 것
(구독자 전용)

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## What happened

Netflix (NFLX) is the world's largest paid streaming service.

Its Q2 2026 quarterly report (10-Q) shows revenue of **$12,559.9m**, up 13% from $11,079.2m a year earlier, operating income of $4,192.6m (a 33.4% margin) and net income of **$3,401.4m** (+9%). First-half net income was **$8,684.2m**, up 44% from $6,015.8m.

According to Note 6, Netflix agreed on December 4, 2025 to acquire Warner Bros. Discovery's streaming and studios businesses (including HBO), but **on February 27, 2026 WBD terminated the agreement in order to merge with Paramount Skydance**. Paramount, on WBD's behalf, paid Netflix a **$2.8bn termination fee**, recorded in 'Interest and other income (expense)' in the first quarter. Most of the $2,670m increase in first-half net income is this one item.

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(End of free preview. What the numbers mean, why it matters, company context, the next-quarter checklist and the arithmetic are available to subscribers — https://aiswingx.com/pricing)

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## FAQ

**Q. Is the termination fee in Q2 results?**

No. It was recorded in Q1 other income; Q2 interest and other income was $51.7m. Only the first-half total ($8,684m of net income) includes the $2.8bn. First-half growth excluding it is calculated in the subscriber section.

**Q. Why did operating cash flow fall?**

MD&A points to higher cash spent on content. Additions to content assets were $4,928m in Q2, up 28% from $3,836m, and operating cash flow fell from $2,423m to $1,744m.

**Q. What company was acquired in March?**

The 10-Q says only that a business combination with a total purchase price of approximately $587m in cash was completed in March 2026; it does not name the company.

**Q. Where can I verify these numbers?**

On SEC EDGAR: Netflix's Q2 2026 Form 10-Q (accession 0001065280-26-000212), statement of operations, cash-flow statement, Note 6 acquisitions, the content obligations note and the equity note.