Key Takeaways
- Netflix stock falls nearly 9% after weak third-quarter revenue guidance.
- Third-quarter revenue forecast missed Wall Street estimates by about $140 million.
- Investors are watching advertising growth as subscriber gains continue to slow.
Netflix shares fell nearly 9% in after-hours trading Thursday, another Netflix stock falls moment, after the streaming company forecast third-quarter revenue below Wall Street expectations, raising fresh concerns about slowing growth as the business matures.
Netflix projected third-quarter revenue of $12.86 billion, below analysts’ estimate of $13 billion. The weaker-than-expected guidance overshadowed second-quarter earnings that topped profit estimates but narrowly missed revenue expectations.
Stock extends yearly decline
Netflix shares closed Thursday’s regular trading session at $74.35, up 0.91%, before Netflix stock falls 8.98% to $67.78 in after-hours trading, according to TradingView.
The Netflix stock falls trend leaves shares down more than 21% this year and about 41% over the past 12 months. Shares remain well below their record high of about $133, reached in June 2025.
This latest Netflix stock falls episode comes during a volatile earnings season that has driven sharp swings across major U.S. indexes. Investors have also been reacting to recent comments from Federal Reserve Chair Jerome Powell on interest rates, adding to broader market uncertainty.
Analysts focus on long-term growth
Analysts said the Netflix stock falls reaction reflects a company entering a more mature stage of growth rather than a weakening business.
Paolo Pescatore, an analyst at PP Foresight, described the outlook as “a naturally maturing growth profile.” He said the guidance does not indicate that Netflix’s business is deteriorating but noted the company now has less room for error because investor expectations remain high.
Netflix also announced it will reduce the frequency of its viewing-hours report to once a year beginning in January 2027. The company said it wants investors to focus more on revenue and operating profit than on viewing metrics.
The company reaffirmed its plan to roughly double annual advertising revenue to $3 billion. It also reported that viewer engagement increased 2% during the first half of 2026.
Netflix is scheduled to report third-quarter earnings on Oct. 20. Investors are expected to closely monitor whether growth in advertising and live programming can help offset slower subscriber gains in the months ahead.
