Netflix released the first season of the show on 5 August, immediately garnering very strong reviews and solid streaming numbers. The streamer took the unusual step of releasing a bonus extra episode two weeks later.
Despite the rare mix of both critical and commercial success, Netflix have taken an unusually long time to renew the show, something attributed to the first season's budget of upwards of $15 million per episode. Although Netflix is no stranger to spending big on a show, they normally prefer to start lower and gradually increase the budget over time, such as Stranger Things' gradually building budget from $7 million per episode in its debut season to over $20 million per episode in the fourth, with some episodes reportedly hitting $30 million. Sandman was a bigger up-front investment and the streaming numbers were very healthy, but perhaps not a slam-dunk on cost. However, Netflix were in danger of acquiring a reputation as the company that always cancels even good shows prematurely, and word-of-mouth on Sandman was so strong that the streamer likely feels a second season should boost the whole show's numbers positively.
The first season adapted the first two graphic novels in the Sandman series (of ten in total, at least in the main series), Preludes and Nocturnes and The Doll's House, as well as two of the stories in the third graphic novel, Dream Country. The second season will, presumably, complete Dream Country and adapt the fourth and fifth graphic novels, Season of Mists and A Game of You, bringing the story to its halfway point and allowing them to adapt the entire series in four seasons (a more enticing proposition than the 5-7 season plans being mooted by other streamers for their big fantasy projects).
The Sandman Season 2 will likely shoot in 2023 for release in 2024.