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July 20 , 2021 Fellow shareholders , In Q2 , revenue increased 19 % year over year to $ 7.3 billion , while operating income rose 36 % year over year to $ 1.8 billion . We finished the quarter with over 209m paid memberships , slightly ahead of our forecast . COVID has created some lumpiness in our membership growth ( higher growth in 2020 , slower growth this year ) , which is working its way through . We continue to focus on improving our service for our members and bringing them the best stories from around the world . Our summary results and forecast for Q3 are below . Q3'21 Q2'20 Q3'20 Q4'20 Q1'21 Q2'21 ( in millions except per share data ) Forecast Revenue $ 6,148 $ 6,436 $ Y / Y % Growth 24.9 % 22.7 % 6,644 $ 21.5 % 7,163 $ 7,342 $ 7,477 24.2 % 19.4 % 16.2 % Operating Income $ 1,358 $ 1,315 $ 954 $ 1,960 $ 1,848 $ 1,550 Operating Margin 22.1 % 20.4 % 14.4 % 27.4 % 25.2 % 20.7 % Net Income Diluted EPS $ SS $ 720 $ 790 $ 542 $ 1,707 $ 1,353 $ 1,158 1.59 $ 1.74 $ 1.19 $ 3.75 $ 2.97 $ 2.55 Global Streaming Paid Memberships 192.95 195.15 203.66 Y / Y % Growth 27.3 % 23.3 % 21.9 % 207.64 13.6 % 209.18 212.68 8.4 % 9.0 % Global Streaming Paid Net Additions 10.09 2.20 8.51 3.98 1.54 3.50 Net cash provided by ( used in ) operating activities $ 1,041 $ 1,264 $ ( 138 ) $ 777 $ ( 64 ) Free Cash Flow * $ 899 $ Shares ( FD ) 453.9 1,145 $ 455.1 ( 284 ) $ 692 $ ( 175 ) 455.3 455.6 455.1 Note : Figures are consolidated , including DVD . * Free cash flow represents Net Cash provided by ( used in ) operating activities less purchases of property and equipment and change in other assets . Q2 Results and Q3 Forecast Revenue growth was driven by an 11 % increase in average paid streaming memberships and 8 % growth in average revenue per membership ( ARM ) ¹ . ARM rose 4 % , excluding a foreign exchange ( FX ) impact of + $ 277m . Operating margin of 25.2 % expanded 3 percentage points compared with the year ago quarter . EPS of $ 2.97 vs. $ 1.59 a year ago included a $ 63m non - cash unrealized loss from FX remeasurement on our Euro denominated debt . The pandemic has created unusual choppiness in our growth and distorts year - over - year comparisons as acquisition and engagement per member household spiked in the early months of COVID . In Q2'21 , our engagement per member household was , as expected , down vs. those unprecedented levels but was still up 17 % compared with a more comparable Q2'19 . Similarly , retention continues to be strong and better than pre - COVID Q2'19 levels , even as average revenue per membership has grown 8 % over this two - year 1 Average revenue per membership ( ARM ) is defined as streaming revenue divided by the average number of streaming paid memberships divided by the number of months in the period . These figures do not include sales taxes or VAT . NETFLIX 1