As competition in the global streaming market intensifies and advertising becomes an increasingly important growth engine, Netflix is deepening its investments in artificial intelligence across both its consumer and advertiser offerings.
In its Q2 2026 shareholder letter, the company outlined how AI is now powering everything from content discovery and creative production to media planning and campaign optimisation, while reiterating that it expects its advertising business to generate approximately $3 billion in revenue in 2026.
Netflix has said it remains on track to generate approximately $3 billion in advertising revenue in 2026, as the streaming giant continues to strengthen its ad-supported business through investments in AI-powered tools, programmatic capabilities and live content. The company shared the update in its Q2 2026 shareholder letter, while reporting revenue of $12.56 billion, up 13% year-on-year, with an operating income of $4.19 billion and an operating margin of 33.4%.
The company said growth in its advertising business is being driven by the strength of its content slate, investments in AI-powered workflows, the Netflix Ads Suite and broader programmatic capabilities. Netflix added that it has expanded AI-powered tools across the advertising lifecycle—from media planning and creative production to campaign management, optimisation and reporting. It is also extending programmatic access to Pause Ads and live inventory, a move aimed at reducing manual processes and making its advertising inventory accessible to a broader range of advertisers.
Beyond advertising, Netflix said it is increasingly leveraging artificial intelligence across its platform and production ecosystem. The company noted that large language models (LLMs) are being used to improve title discovery, understand member preferences and power new voice search and AI-driven natural language search experiences for users.
Netflix also revealed that generative AI workflows have been used across roughly 300 titles in 2026, primarily in post-production. According to the company, these tools are enabling creators to produce more complex visual sequences faster and at lower costs than traditional methods. It cited productions including ‘Glory’ (India), ‘Brasil 70: A Saga do Tri’ (Brazil) and ‘The American Experiment’ (US) as examples where GenAI was used to create enhanced crowds, historical battle sequences and large-scale world-building shots.
On the content front, Netflix said member engagement remained healthy during the first half of the year, with viewers watching more than 97 billion hours, a 2% increase year-on-year, despite competition from major sporting events including the Winter Olympics and the FIFA World Cup. The company added that non-English programming accounted for more than one-third of total viewing, with standout performances from titles originating in Korea, Japan, Spain and India.
Looking ahead, Netflix has narrowed its full-year 2026 revenue forecast to $51.0 billion-$51.4 billion, representing expected growth of 13-14%, while maintaining its operating margin guidance of 31.5%. The company expects continued momentum to be driven by membership growth, pricing and the expansion of its advertising business.
