Netflix stock drops after Q3 revenue falls short, co-CEO says not all views are ‘created equal’
Jake Conley· Breaking Business News Reporter
Updated Fri, 17 July 2026 at 3:08 am GMT+5:30
5 min read
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Netflix (NFLX) stock fell over 8% in extended trading after the company‘s third quarter outlook fell short of expectations and engagement trends failed to 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. Revenue growth also moderated from 16.2% 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
Netflix shares are down 40% over the past 12 months, and the company acknowledged that “the entertainment industry remains dynamic and competitive.”
“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,” management stated
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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 as measured 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
“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
“All around, there’s really nothing here to get excited about,” Ranganathan said
‘Not all hours are created equal’
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
Asked by analysts about the rate of change in viewer hours, Netflix co-CEO Greg Peters said, “not all hours are created equal,” citing live events as one example. Live events programming drives revenue and provides strong opportunities for viewer acquisition, Peters said, but yields fewer raw hours
