Netflix (NFLX) stock fell over 7% in extended trading after the company’s third quarter outlook fell short of expectations and engagement trends didn’t inspire confidence on the Street.
The streaming giant reported earnings that beat estimates and revenue that was roughly in line with forecasts in Q2. Revenue grew 13.4% year over year to $12.56 billion, slightly underperforming Bloomberg consensus estimates of $12.58 billion and reflecting a moderation from 16.2% revenue growth in the first quarter of this year.
Earnings per share came in at $0.80, slightly beating analyst expectations of $0.79 and coming in above the $0.73 reported a year ago.
“The entertainment industry remains dynamic and competitive,” Netflix management stated. “We aim to stay ahead by executing against our three areas of focus: delivering more entertainment value, leveraging technology to improve every aspect of our service, and improving monetization.”
Netflix guided revenue for the current quarter at $12.86 billion, against Wall Street’s expectation of $13 billion. The company sees earnings per share for the third quarter at $0.82, compared to analyst estimates of $0.84.
For full-year 2026, Netflix expects revenue of $51 billion to 51.4 billion, roughly in line with its previously forecast range of $50.7 billion to $51.7 billion.
Broken down regionally, Netflix’s US and Canada market, its biggest by a wide margin by revenue, recorded year-over-year growth of 10% in the second quarter, underperforming the segment’s growth over the last four quarters. Out of its regional segments, only Latin America saw growth accelerate from the prior quarter.
View hours, a crucial metric for streamers such as Netflix, crossed 97 billion in the first half — a record for the company. The figure represents 2% in the first half of 2026, versus growth of 1.5% in 2025, “despite the competitive impact of the Winter Olympics and the World Cup this year,” the company said.
However, Netflix announced Thursday that, instead of publishing detailed viewership metrics with its earnings disclosures, the company will publish them annually in the first quarter of each year, beginning in 2027. The decision is driven by a desire to “keep the focus on our primary financial metrics,” management said.
“There is definitely some kind of slowdown, and I’m not necessarily sure management has articulated what they can do to reinvigorate the business here,” Geetha Ranganathan, Bloomberg Intelligence senior media analyst, told Yahoo Finance, pointing to third-quarter revenue guidance lighter than what Wall Street was looking for.
